Profits for electronics parts maker Lite-On Technology Corp (光寶科技) grew 16 percent annually in the first quarter of the year, driven mainly by high-end modules for dual camera lenses used in smartphones, the company reported yesterday.
The company’s net income of NT$1.98 billion (US$65.52 million) marks its highest quarterly result over the period in the past 13 years, Lite-On data showed, while earnings per share were NT$0.85 last quarter, compared with NT$0.74 a year earlier.
“The high-end camera module segment was the main contributor last quarter. Its revenue expanded by 20 percent from the same time a year ago,” Lite-On chief executive officer Warren Chen (陳廣中) told an investors’ conference in Taipei.
Higher shipments of its LED components and LED outdoor lighting products also boosted its earnings in the January-to-March period, Lite-On said.
Consolidated sales were NT$51.4 billion in the first quarter, up 3 percent year-on-year, Lite-On reported earlier this month, when it attributed the increase to stable market growth from the cloud computing, LED lighting and high-end camera module businesses.
However, the company yesterday said its operating margin contracted by 0.09 percentage points annually to 4 percent last quarter, while its gross margin dropped 0.22 percentage points to 13 percent, citing the negative effect of rising raw material costs that eroded earnings of its information technology business.
In addition, a supply shortage of NAND flash memory chips also delayed shipments of its storage products and affected the overall margin performance, the company said.
Chen said the continued component shortage and increasing prices of raw materials would keep adding pressure on Lite-On’s margin performance this quarter.
“On the bright side, as more clients adopt dual-camera features for their flagship smartphones, we forecast the top and bottom lines to climb further,” Chen said.
Lite-On’s camera clients are mainly Chinese smartphone vendors, such as Huawei Technologies Co (華為) and Oppo Mobile Telecommunications Co (歐珀移動), which both launched high-end smartphones with dual cameras this quarter.
In light of the growing demand for camera modules, the company plans to expand its production capacity in the second half of this year, Chen said, declining to disclose the range of the expansion as the investment amount is not yet finalized.
The expanded capacity would be used for smartphones and new applications, such as camera modules for 3D-sensing and 360-degree cameras, Chen said, adding that they could be used in wearable products, drones or for surveillance.
Lite-On shares have risen 8.23 percent since the beginning of the year, compared with the broader market’s 6.68 percent increase. The stock closed at NT$52.6 yesterday in Taipei trading.
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a
Taipei 101, one of the nation’s leading shopping centers, is planning to reduce its business hours due to decreased demand amid the COVID-19 pandemic. Taipei 101 is to open daily at noon and close at 9pm from April 6, building management said in a statement on Monday. The shopping center has been opening at 11am and closing at 9:30pm from Sunday to Thursday, while closing at 10pm on Friday and Saturday. The restaurants in the food court — on the basement level — would adjust their business hours as necessary, but the supermarket would continue to open at 9am daily, management said. The shopping