Epistar Corp (晶元光電) shares yesterday dropped 1.24 percent, underperforming the broader market’s 0.09 percent decline, after on Thursday night reporting a worse-than-expected net loss of NT$99.06 million (US$3.12 million) for last quarter.
The company reported net profit of NT$615.05 million a year earlier and NT$714.11 million in the prior quarter.
Epistar, the nation’s No. 1 LED chipmaker, lost NT$0.11 per share last quarter, compared with the market’s consensus estimate of NT$0.38 earnings per share, mainly due to falling average selling prices amid intensified market competition.
“The disappointing results were mainly due to a nearly 10 percent decline on the average selling prices for both raw and packaged chips due to strong competition from China and poor product mix,” Primasia Securities Co (?亞證券) analyst Filia Lin said in a note to clients yesterday.
Epistar shares closed at NT$27.85 in Taipei trading yesterday, having declined 55.72 percent so far this year, Taiwan Stock Exchange data showed.
To safeguard shareholders’ interest, the company’s board on Thursday approved a plan to buy back 20 million of its shares at between NT$25 and NT$40 per share on the open market.
The company plans to spend up to NT$45.52 billion in the buyback scheme, Epistar said.
The scheme started yesterday and is to continue through Oct. 6, it said.
Company chairman Lee Biing-jye (李秉傑) in June told shareholders that Royal Philips NV’s price cut for LED bulbs spurred severe pricing competition in the US market last quarter, which promoted LED chip suppliers to lower their prices or redesign chips to meet demand from clients.
However, Lee said the price-cutting has stopped, as there is limited room for price concessions, and he expects Epistar’s core business to improve this quarter on the back of recovering demand for LED lighting products.
Despite Lee’s optimism for this quarter, Primasia said some negative factors remain in sight to put pressure on the firm’s business for the remainder of this year, such as international lighting brands’ demand for cheaper LED chips and pricing competition among Epistar’s peers.
“We believe Epistar may stay in a trough in the second half of this year, despite its solid capability on production capacity, and research and development,” Lin said.
Epistar’s revenue last month climbed 10.47 percent to NT$2.11 billion from NT$1.91 billion in June. However, the number was 24.23 percent lower than the NT$2.78 billion recorded in July last year, company data showed.
From January through last month, cumulative revenue totaled NT$15.52 billion, down 9.48 percent from last year’s NT$17.15 billion.
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