Smartphone camera lens maker Largan Precision Co (大立光), a major supplier to Apple Inc, on Saturday reported a 19.49 percent drop in sales last month from a month earlier, which it said was due to weaker global demand.
Consolidated sales last month fell to NT$3.23 billion (US$104.66 million), the lowest since March last year, when they stood at NT$3.14 billion, Largan said in a statement.
The figure was a 33.86 percent decline from December 2017, the company said.
Largan’s 20 megapixel lenses and high-end models, which command higher prices, accounted for 10 to 20 percent of its total sales last month, while its 10 megapixel lenses made up 60 to 70 percent and 8 megapixel lenses 10 to 20 percent, Largan said.
Analysts attributed the decline in sales to disappointing shipments of the latest iPhone models released in September, saying that Apple has been cutting back on orders to its suppliers amid lower-than-expected demand.
Largan, which also makes lenses for Huawei Technologies Ltd (華為) and Samsung Electronics Co, said that last month’s results were in line with the company’s estimates.
Revenue this month is expected to remain “flattish from last month,” a company spokeswoman said.
Last month’s sales came in better than some analysts exepected, as they had forecast that sales would be as low as NT$2.6 billion, said Jeff Pu (蒲得宇), an analyst at GF Securities (Hong Kong) Brokerage Ltd (廣發證券香港).
“Largan’s December result and guidance for January show that while iPhone demand continues to be tepid, Chinese smartphone makers are not faring as bad as feared,” Pu said. “Meanwhile, orders from Samsung are also making minor contributions to its revenue.”
In the October-to-December period, Largan’s consolidated sales fell 23.8 percent from a quarter earlier and 22.64 percent from the same period in 2017 to NT$12.45 billion.
It was the company’s lowest fourth-quarter figure in eight years, which is usually a peak season for the consumer electronics industry.
Over the whole of last year, Largan recorded consolidated sales of NT$49.95 billion, an annual decline of 5.98 percent.
Apple on Wednesday said that Chinese sales came in lower than expected in the holiday quarter and slashed its revenue outlook for the first time in nearly two decades.
The announcement triggered a 10 percent decline in Apple shares the next day, the biggest drop in nearly six years, and pushed down the stocks of many of the company’s suppliers.
Since then, Largan shares have dropped 5.07 percent, sliding 4.13 percent on Friday alone to close at NT$2,905 in Taipei trading and falling below NT$3,000 for the first time since July 11, 2016, when they ended at NT$2,990.
Largan has scheduled an investors’ conference on Thursday to present its results for last quarter and give guidance for this quarter.
In the first nine months of last year, Largan posted NT$17.89 billion in net profit, up 3 percent from a year earlier, with earnings per share of NT$133.38.
Additional reporting by Bloomberg
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