Electronics component maker Lite-On Technology Corp (光寶科技) yesterday said it is expecting moderate growth in sales and net income of up to 5 percent this quarter, after weakening demand and diminished operating scale dragged on performance last quarter.
“Growth this quarter will be driven by product mix segments that are more resilient against cyclical factors and industry downturns, such as power supplies, commercial LED lighting and enclosures and management systems for cloud-computing servers,” Lite-On CEO Warren Chen (陳廣中) told an investors’ conference.
The company is expecting a wave of new mobile devices scheduled to be released this quarter to propel sales for high-end camera modules, while the July-to-September period — the traditional high season for video games — is expected to see a rise in optical drive sales.
With new project launches taking place in the second half of this year, the company’s core businesses are expected to maintain a steady performance from last year, Chen said.
“We are expecting our clients to gradually become less conservative on the inventory situation in the second half,” he said.
Lite-On is implementing plans to refocus and reallocate resources, such as shifting its LED business from supplying upstream components, such as backlight items and chips, to end-user applications, such as automotive and street lighting, in order to improve profit margins.
However, Chen added that the company’s solid-state drive storage business is facing aggressive pricing competition from major rival Samsung Electronics Co.
In the second quarter, Lite-on reported that net income declined by 13 percent quarter-on-quarter and 30 percent year-on-year to NT$1.43 billion (US$44.58 million), or NT$0.62 per share.
Sales during the period totaled NT$51.6 billion, down by 11 percent from last year, with gross margin and operating margin at 12.5 percent and 3.1 percent respectively.
Net income in the first half of the year totaled NT$3.08 billion, down by 11 percent from a year ago, on sales of NT$103.2 billion, down by 6 percent year-on-year.
The company yesterday released its revenue for last month, which fell 1 percent monthly and 16 percent year-on-year to NT$17.5 billion, bringing cumulative revenue in the first seven months to NT$120.7 billion, down by 7.9 percent year-on-year.
Meanwhile, the company yesterday declined to elaborate on the progress of its share buyback plan, which aims to repurchase up to 100 million shares at between NT$25.34 and NT$53.97 per share from July 21 to Sept. 20.
“I feel that Lite-On’s share price does not accurately reflect the company’s performance,” Chen said, adding that it is an ideal time to buy, as shares approach their book value.
Lite-On shares rose 1.59 percent to NT$32 yesterday in Taipei trading.
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