Casetek Holdings Ltd (鎧勝) yesterday gave a conservative guidance on its business outlook this quarter and likely beyond, as order visibility remains low and Japan’s recent earthquakes would disrupt component shipments.
“The macro-environment is worse than during the global financial crisis in 2008 and 2009, and we have to be very cautious about cost controls this time,” chief executive officer Gary Chuang (莊育志) told a teleconference.
The Cayman Islands-registered company, which supplies metal casings for Apple Inc, posted NT$922.35 million (US$28.5 million) in net profit for last quarter, or earnings per share of NT$2.72, company data showed.
The results suggest a mild increase of 2.1 percent from a year earlier, but lower than its own target, Chuang said.
Gross margin slipped to 25.2 percent last quarter, from 32.6 percent for the previous three months, but better than 18.6 percent a year earlier, chief financial officer Jonathan Chang (張昭平) said.
Revenue declines and higher raw material prices accounted for the margin loss, Chang said.
Sales totaled NT$8.42 billion during the first quarter, plunging 31.7 percent from the preceding quarter, company data showed.
“Pricing pressures have risen to an unprecedented high, but Casetek will not embark on cut-throat competition, but aim to be a quality product supplier,” Chang said, adding that drastic price cuts now would affect selling prices later in the high season.
Chuang said he did not see any reason to be upbeat, as the quakes in Japan’s Kumamoto Prefecture last month would delay component supply, while hopes of orders from a major client have proven elusive.
Chuang declined to elaborate on his orders comment except to say it referred to laptops.
Credit Suisse Group AG recently revised down its earnings forecast for Casetek, citing concerns over softening demand for Apple’s devices and a potential delay in the mass production of MacBook components.
Casetek expects business to improve in the second half of the year, with notebook devices to supply the growth momentum, Chuang said.
“The company should be able to gain market share in notebook and tablet casings,” he said.
Casetek also voiced confidence in the light-metal processing technology, saying the market has yet to saturate.
Some analysts have said Apple might plan to switch casing materials to glass from metal for the next-generation iPhone series, which could impact Casetek.
“There is no material change in the next one to two years from NB and tablet customers… As for smartphones, the answer is not clear,” Chuang said.
Shares in Casetek yesterday closed down 3.23 percent to NT$135 on the Taipei Exchange, the local bourse for companies with small and medium capitalization, deeper than TPEX’s 1.04 percent fall.
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