Handset camera lens supplier Largan Precision Co (大立光) yesterday reported a record-high gross margin of 66.4 percent for last quarter on a better product portfolio and improved shipments.
Last quarter’s gross margin was up 8.65 percentage points year-on-year and 6.69 percentage points quarter-on-quarter, beating the market consensus estimate of 60 percent.
Operating margin also outperformed the market consensus to reach 57.64 percent last quarter, increasing 6.36 percentage points year-on-year and 7.05 percentage points quarter-on-quarter.
“Increasing shipments of new products benefited the performance of gross margin last quarter. Fewer shipments of voice coil motors also helped gross margin,” Largan chief executive Adam Lin (林恩平) told a teleconference.
Net income was NT$3.69 billion (US$115.05 million) last quarter, declining 23.44 percent from last year’s NT$4.82 billion, but 1.93 percent higher than the previous quarter’s NT$3.62 billion, company data showed.
Earnings per share were NT$27.51, compared with last year’s NT$35.96 and the previous quarter’s NT$27.91.
Largan’s net profit for last quarter fell short of BNP Paribas SA’s forecast of NT$4.29 billion, or earnings per share of NT$32.03.
Largan attributed the decline in net profit partly to a tax payment of NT$1.3 billion for undistributed earnings last quarter.
For this quarter, Largan said its revenue would be better than last quarter, driven by an increasing number of orders from clients.
“This month will be better than last month and next month is expected to outpace this month,” Lin said, citing clients’ order forecasts.
Lin said that the number of new molds for dual camera lenses this quarter is more than last quarter, suggesting a continuing trend for dual camera lenses to be used in the smartphone industry.
However, whether Largan’s shipments of the dual camera lenses this quarter would grow in tandem with the expanding number of molds would depend on clients’ decisions and consumer demand, he added.
With many of Largan’s clients planning to launch new smartphones this quarter, Lin said the improvement in the company’s product portfolio would boost gross margin this quarter.
However, the yield on new products at the beginning of a cycle of massive shipments could potentially drag on the performance of gross margin this quarter, he said.
Lin said the number of retail channels for Largan’s contact lenses has increased to 1,000 stores across the nation and the company recently opened its third direct store in Taipei.
Lin said that the company would aggressively expand the operational scope of its contact lens business, in a bid to help the segment become profitable as soon as possible.
Largan shares fell 1.73 percent to close at NT$3,120 in Taipei trading yesterday, underperforming the TAIEX, which gained 0.1 percent.
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