Tue, Jul 30, 2019 - Page 11 News List

Merry trims its outlook, despite surge in profit

By Natasha Li  /  Staff reporter

Audio electronics maker Merry Electronics Co (美律) yesterday trimmed its outlook for this quarter, despite net profit surging by 86.64 percent last quarter from the previous quarter.

Gross margin is forecast to dip to between 13 and 16 percent this quarter, from 16.12 percent last quarter, while revenue is likely to be flat from last quarter’s NT$10.06 billion (US$323.5 million) due to customers shifting orders ahead of schedule, Merry president Allen Huang (黃朝豊) told investors.

In addition, the company has low order visibility for the fourth quarter, despite it being the traditional peak season for the consumer electronics sector, Huang said.

Merry is mass-producing three types of true wireless stereos, while planning to add another seven next year, “of which one or two would incorporate smart noise detection technology, which will significantly contribute to our overall revenue,” he said.

“We also want to raise the sales proportion of speakers for mobile phones to 30 percent,” compared with 27 percent of overall sales, he added.

Although such products have lower gross margins, the company is working to adjust its product mix to avert market risks, Huang said.

During the three months to June 30, net profit was NT$776.28 million, or earnings per share of NT$3.8.

On an annual basis, net profit jumped nearly 950 percent.

Second-quarter revenue increased 31.88 percent quarter-on-quarter and 50.02 percent year-on-year, which the company attributed to booming sales of headsets for entertainment devices and early orders from customers.

Sales of headsets used in entertainment devices increased from 66 percent of overall revenue to 68 percent last quarter.

In terms of product applications, audio headsets increased from 43 percent to 47 percent last quarter, while true wireless stereos increased from 31 percent to 34 percent.

In the first half of the year, net profit grew more than 500 percent to NT$1.19 billion, or earnings per share of NT$5.89.

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