Fri, Jan 12, 2018 - Page 12 News List

Largan posts record quarterly profit

HYBRID LENSES:Largan has downplayed concerns over technology competition, saying that glass-plastic lenses are more attractive to the automotive parts industry

By Lisa Wang  /  Staff reporter

Largan Precision Co (大立光), which supplies camera lenses for Apple Inc’s iPhone series, yesterday posted a record-high quarterly profit backed by a stronger-than-expected gross margin.

It credited the gains to shipping more higher-priced premium lenses with improved resolution and apertures.

However, momentum started dwindling last month as slow season affects weighed on mobile phone shipments from clients.

The weakness is likely to extend into this quarter, Largan said.

“We do not have full year visibility. It is up to customers’ [ordering],” Largan chief executive officer Adam Lin (林恩平) said at yesterday’s investor teleconference in response to questions about whether this year would be a growth period compared with last year.

“January was weaker than December. It looks like February will also be a weaker [month] than January,” Lin said.

A steeper-than-expected 13-percent monthly decline in revenue last month spooked investors and raised concerns over market share losses.

Lin said he did not rule out the possibility of posting an annual contraction in revenue for the first two months of this year, compared with NT$7.22 billion (US$244 million) in the same period last year.

However, Largan does not have any plans to delay the trial production schedule of its new plant in Taichung, Lin said.

“Most mobile phone vendors still prefer equipping their flagship models with high-specification camera lenses,” he said.

Largan usually prepares orders based on customers’ two to three month forecasts, he said.

The company would consider producing lower-end camera lenses to prevent equipment from idling, he said.

“I believe that plastic [lenses] will remain the mainstream this year, because their performance is not inferior to that of [hybrid glass-plastic lenses],” Lin said in response to investors’ concerns over increased technological competition.

Largan’s glass camera lenses would primarily be used in cars, rather than smartphones, Lin said.

The company has not launched any glass camera lenses, as they require a longer qualification process from car vendors, given strict weather durability requirements for vehicle components.

During the quarter ending on Sunday last week, net income climbed 10.81 percent to NT$8.61 billion, compared with NT$7.77 billion in the third quarter last year, Largan’s financial statement showed.

Gross margin climbed to 71.66 percent last quarter, compared with 68 percent in the prior quarter, company financial statements showed.

Largan attributed the improvement to increases in shipments and greater contribution from higher-priced 10-megapixel camera lenses. About 70 percent to 80 percent of shipments last quarter were 10-megapixel lenses.

Net income climbed to NT$25.98 billion last year, or earnings per share of NT$193.66, a record high.

Shares in Largan closed 1.19 percent lower at NT$3,730 yesterday on the Taiwan Stock Exchange.

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