MediaTek Inc (聯發科) yesterday said strong US dollar would continue to curb consumer purchases and its chips in some emerging markets this quarter after the foreign exchange issue drove the handset schipmaker’s last quarter net profit to the weakest in 7 quarters.
MediaTek is counting on strong seasonal demand in the second half of this year to boost demand for its new chips and to achieve its full-year smartphone chip shipment forecast of 450 million units, which includes 150 million units of 4G long-term evolution (LTE) chips.
“We still hope to reach those goals [set in February], despite the uncertainty of global and emerging markets. Business this year will still grow from last year,” MediaTek president Hsieh Ching-jiang (謝清江) said during a teleconference.
However, revenue this year might expand at an annual rate of 10 percent from NT$213.06 billion (US$6.93 billion), rather than the previous estimate of between 10 percent and 20 percent, because of the unfavorable foreign exchange rates, Hsieh said.
Revenue is expected to reach between NT$45.2 billion and NT$49 billion this quarter, compared with NT$47.54 billion last quarter, Hsieh said.
Despite escalating competition in the market, gross margin would be little changed at about 46.5 percent this quarter, compared with last quarter’s 47 percent, he said.
Smartphone chip shipments would rise slightly to 90 million units this quarter from last quarter’s 85 million units, before a 30 percent jump next quarter, Hsieh said.
MediaTek’s revenue projection is worse than the seasonal growth of 20 percent seen in the second quarter in recent years and lower than the forecasts by UBS analyst Eric Chen (陳慧明) and Maybank analyst Warren Lau (劉華仁), who originally predicted that MediaTek would make NT$57.41 billion and at least NT$51 billion respectively in revenue this quarter.
“Guidance for the second quarter is disappointing… [The forecast] is ‘even lower than the recently lowered consensus,’” Yuanta Securities Co (元大證券) analyst George Chang (張家麒) said yesterday.
Chang lowered the 12-month share price target for MediaTek to NT$420 from NT$435.
During the first quarter, net income plunged 30.3 percent to NT$7.25 billion, compared with NT$10.41 billion in the fourth quarter of last year. On an annual basis, net income fell 28.5 percent from NT$10.14 billion.
Last quarter’s earnings fell short of Chen’s estimate of NT$7.78 billion and Lau’s forecast of NT$8.14 billion.
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