TPK Holding Co’s (宸鴻) net profit last quarter more than doubled to NT$54 million (US$1.71 million) as better-than-expected seasonal demand from the tablets segment helped offset a slump in smartphones, corportate officials said.
It reported net profit of NT$24 million in the first quarter.
Earnings per share rose to NT$0.13 last quarter from NT$0.06 a quarter earlier.
However, the touch module and sensor supplier reported an operating loss of NT$14 million, falling short of its expectation of breaking even, and reversing the operating income of NT$119 million it reported in the first quarter.
It expects a pickup in seasonal demand to bring its operating profit margin back to 1 percent to 2 percent this quarter, from zero percent last quarter.
“The third quarter is typically a peak season. There is no exception this year. Shipments will increase as usual,” TPK chief strategic officer Freddie Liu (劉詩亮) told investors in a teleconference call.
“However, business visibility for the second half of this year is lower [than usual] as global political and economic uncertainty is weighing on sales of smartphones and other electronics following the launches,” he said.
Based on orders on hand, TPK is confident of achieving a 20 percent growth in revenue this quarter, from NT$28.45 billion last quarter, Liu said.
It is expected to benefit from seasonal demand as the major smartphone makers are to launch new products this quarter, he said.
Touch products used in smartphones contributed 38 percent of TPK’s revenue last quarter, down from 46 percent in the previous quarter, the company said.
TPK expects very minimal impact from US President Donald Trump’s threat to impose an extra 10 percent tariff on US$300 billion of Chinese goods, chief executive Leo Hsieh (謝立群) said, as a very small portion of its products are shipped directly to the US.
TPK saw a good start for this quarter as last month’s revenue jumped 24.68 percent monthly and 3.6 percent annually to NT$12.53 billion, the highest in six months.
The company plans to spend NT$4 billion this year on buying new equipment, paving the way for the production of next-generation silver-nanowire (SNW) touch technology early next year.
TPK is pinning its hopes on the new touch technology to drive revenue and net profit growth, given that the SNW technology can make flexible touch products used in foldable smartphones at lower costs than rival technologies.
There would be a long way to go before foldable smartphones become mainstream, as most phone vendors are staying on the sidelines for now, Hsieh said.
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