E Ink Holdings Inc (元太科技), the world’s sole e-paper display supplier, yesterday said revenue is likely to be little changed this quarter from last quarter’s NT$2.96 billion (US$98 million) due to seasonal weakness.
However, the company expects its operations to improve on a quarterly basis, with stronger shipments in the second half likely helping the company to break even, chief financial officer Eddie Chen (陳彥松) told investors.
“E Ink has been too dependent on a single market and a single client,” Chen said.
However, “this year is a pivotal period for the company” as it seeks to diversify its product lineup, Chen said, adding that the company has begun to see its efforts bear fruit.
E Ink, which counts Amazon.com and Sony Corp as its major clients for e-paper displays used in e-readers, is expanding its product portfolio beyond e-readers to include colored e-tags, luggage tags, a second display for smartphones and wearable devices, he said.
Those new products are expected to account for 5 percent of the company’s e-paper display revenue this year, from virtually zero last year, Chen said.
E-paper displays are E Ink’s biggest revenue source, accounting for up to 70 percent of sales last year. LCD panels made up the remaining 30 percent.
“We are seeing yields improve, which we hope will give a boost to our [gross] margin,” Chen said.
E Ink posted a gross margin of minus-1.6 percent last quarter, from 25.7 percent the previous quarter and 5 percent a year ago. The company attributed the fall to declining yields and higher research and development expenses.
E Ink swung into a net loss of NT$965 million last quarter, from a net profit of NT$1.02 billion the previous quarter, because of sluggish demand and higher expenses on developing new products. On an annual basis, the quarterly loss widened from a loss of NT$493 million.
Non-operating income — primarily from royalties — tumbled 60 percent to NT$326 million last quarter, from NT$1.11 billion in the final quarter of last year, its financial statement showed.
Royalty payments are likely to increase this year, thanks to growing demand for high-definition displays and more royalty agreements, Chen said.
Flat-panel makers, including LG Display Co and Innolux Corp (群創光電), are paying royalties to E Ink for using its technology.
As part of its turnaround efforts, E Ink is working to expand its customer base, he said.
In Europe, Deutsche Telecom’s new e-reader, Tolino Vision, and e-reader vendor Pocketbook’s two new models use E Ink’s e-paper display, the company said.
E Ink shares surged 1.27 percent to NT$19.90 yesterday, outperforming the TAIEX, which slid 0.29 percent.
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