Epistar Corp (晶元光電), the nation’s biggest LED chipmaker, on Thursday reported that it swung into profit in the second quarter, although it was still in the red during the first half of the year.
Net income was NT$744.54 million (US$24.76 million) in the April-to-June quarter, or earnings per share (EPS) of NT$0.81, the company said in a filing with the Taiwan Stock Exchange.
Last quarter’s results were a substantial improvement from a net loss of NT$841.69 million made in the January-to-March quarter, or a net loss per share of NT$0.91. They also represented a 115 percent increase from a net income of NT$346.27 million a year ago, or EPS of NT$0.38.
In the first half, the company posted a net loss per share of NT$0.11, compared with EPS of NT$0.11 last year.
Primasia Securities Co yesterday attributed the second-quarter turnaround to a high sales mix of high-margin LED products and improving yields. Other positive factors include higher average selling prices and lower-than-expected expenses for promotions and research, the brokerage said.
If a European convertible bond-related non-operating charge of between NT$200 million and NT$250 million was excluded, Epistar would have reported a net income of NT$945 million for last quarter, or EPS of NT$1.03, according to UBS Securities Pte Ltd.
Epistar ranks as the world’s largest aluminum-gallium-indium-phosphide (AlGalnP) epitaxial wafer and chip supplier and the second-largest indium-gallium-nitride (InGaN) epitaxial wafer and chipmaker.
Over the past five years, it has acquired smaller competitors — including United Epitaxy Co (國聯光電), Epitech Technology Corp (聯詮光電), Highlink Technology Corp (連勇科技) and Huga Optotech Inc (廣鎵光電)— to expand capacity and outgrow peers.
Last month, the company announced a merger with smaller rival Formosa Epitaxy Inc (ForEpi, 璨圓光電) through a share-swap transaction, which is to take effect on Dec. 30, as capacity constraints caused its sales to fall by 1 percent from June to NT$2.79 billion.
Cumulative sales for the first seven months still expanded 39.36 percent to NT$17.15 billion from a year ago, company data showed.
UBS Securities analyst Samson Hung (洪希民) said revenue this month should be higher than last month as Epistar could outsource its orders to ForEpi.
Hung forecast demand from general lighting would remain strong to support revenue this quarter, up 14 percent quarter-on-quarter and 62 percent year-on-year.
The company’s rising scale and better product mix could also lift its gross margin to 24.7 percent this quarter from 21.43 percent last quarter, with operating margin improving to 16.6 percent from 12.87 percent last quarter, he said.
Epistar shares, which have outpaced the broader market by 11.2 percent so far this year, fell 1.03 percent to NT$67.0 in Taipei trading yesterday.
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