Catcher Technology Co (可成), which supplies metal casings for Apple Inc’s iPhones, yesterday maintained a conservative outlook for gross margin this quarter, but said the figure would remain above 40 percent.
The company also said its profitability for this quarter would be similar to the previous quarter, citing a solid relationship with its major clients, despite negative market speculation.
“Fluctuation in the industry is inevitable, but Catcher’s technology and management is solid and strong compared with its competitors,” Catcher chairman and chief executive officer Allen Horng (洪水樹) told investors on a conference call.
Currently, the firm’s five major clients account for 90 percent of its capacity, but Horng assured investors that the company’s strategy is always to strive for more clients and to manufacture more products.
In the July-to-September quarter, Catcher reported net income of NT$4.81 billion (US$157.18 million), or NT$6.36 per share, up 73.6 percent year-on-year and 32 percent quarter-on-quarter.
Gross margin was 48.8 percent for last quarter, beating a market consensus of 44.5 percent, which Deutsche Bank analyst Birdy Lu (呂家霖) attributed to a better product mix and favorable foreign-exchange rates.
However, the margin last quarter was still lower than 49.2 percent in the second quarter, although higher than 41.7 in the third quarter of last year.
Horng said Catcher reported an average of 46 percent gross margin in the past three quarters.
Revenue for last quarter hit a record high at NT$14.53 billion, up 39.2 percent year-on-year and 9.1 percent quarter-on-quarter.
In the first 10 months this year, the firm’s cumulative sales totaled NT$43.67 billion, up 25.92 percent from a year earlier, the company reported yesterday, after last month’s sales grew 18.81 percent year-on-year and 10.86 percent month-on-month to NT$5.41 billion.
Catcher spokesperson James Wu (巫俊毅) said that although the company solved labor shortage issues in China in September and production capacity is back on track, the company still suffered increased labor costs this year.
Therefore, the company has drafted some measures to stabilize employee turnover, including wage hikes, as higher employee retention would improve the company’s value and create a better yield rate, Wu said.
Despite Catcher’s rather conservative business guidance, it might be able to post 20 percent quarter-on-quarter sales growth this quarter, Lu said in a client note ahead of the conference call.
“Catcher’s order flows from HTC Corp (宏達電) and Sony Corp could fall 40 percent quarterly, but casing sales for iPhones and iPads could grow more than 100 percent this quarter,” Lu said in the note.
Daiwa Capital Markets Inc also expects Catcher perform strongly this quarter.
“We remain positive on Catcher's revenue momentum in the fourth quarter, driven by volume ramp-ups for major clients’ new products, including Apple's iPhone 6, iPad Air and Sony's Xperia Z3,” Taipei-based Daiwa analyst Steven Tseng (曾緒良) said in a separate report.
Catcher shares rose 0.38 percent to NT$261 in Taipei trading yesterday.
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