TPK Holding Co (宸鴻), which supplies touchpanels for Apple Inc’s iPads and Watch wearable device, yesterday reported the weakest quarterly net profits in the company’s history: NT$66 million (US$2.1 million) for the fourth quarter last year, dampened by a one-time asset impairment.
TPK booked about NT$1.84 billion in asset impairment for the past quarter as the company streamlined a cover glass plant in China.
Gross margin improved only slightly to 7.3 percent last quarter, compared with 6.6 percent in the previous quarter. Excluding the asset impairment, gross margin would have jumped to 11.5 percent.
The quarterly result fell short of CIMB analyst Eric Lin’s (林育名) forecast of NT$100 million and UBS analyst Arthur Hsieh’s (謝宗文) prediction of NT$117 million.
Lin last week raised his rating on TPK to “hold” from “reduce,” while Hsieh retained a “neutral” rating.
TPK chief financial executive Freddie Liu (劉詩亮) told investors yesterday that strong demand for tablets and wearable devices has helped the company to return to profits. In the third quarter last year, TPK lost NT$241 million.
TPK is expected to drift into quarterly loss this quarter after booking NT$1.1 billion loss stemming from fire damage at a Chinese plant, Liu said. Operating profit margin is expected to be close to break-even level this quarter, down from 0.2 percent in the final quarter of last year, Liu added.
“We hope the first quarter will be the weakest period for the company this year,” Liu said.
Revenue is expected to plunge by between 25 percent and 30 percent from last quarter’s NT$39.6 billion, Liu said, citing seasonal weak demand.
That would bring TPK’s current quarter’s revenue down to between NT$27.72 billion and NT$29.7 billion, which is much lower than Lin’s estimate of NT$35.2 billion and Hsieh’s NT$32.79 billion.
Last year as a whole, TPK’s net income plunged 96 percent to NT$277 million, compared with NT$7.19 billion in 2013. Revenue dropped 18.6 percent to NT$129.52 billion last year from NT$159.07 billion in the prior year.
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