Touch module and sensor supplier TPK Holding Co (宸鴻) yesterday reported that last quarter’s net profits were the best of the past seven quarters, thanks to strong sales of customers’ lower-priced smartphones during the annual peak season.
Net profit more than tripled to NT$228 million (US$7.5 million) last quarter from NT$54 million in the second quarter, a company financial statement showed.
On an annual basis, net profits increased 19.37 percent from NT$191 million. Earnings per share increased to NT$0.56 last quarter, from NT$0.13 a quarter earlier and NT$0.47 last year.
Revenue soared 40 percent sequentially to NT$40.05 billion, with the fastest growth coming from the company’s smartphone products at 75 percent.
Overall revenue growth greatly surpassed the company’s own estimate from three months ago that predicted a 20 percent quarterly increase.
With the electronics industry entering a slow season, TPK said that the fourth quarter would be a “typical off-season,” with revenue expected to fall by 10 percent from last quarter.
“Company revenue usually hits its peak in the third quarter. This year is no exception,” TPK chief strategic officer Freddie Liu (劉詩亮) told an investors’ teleconference.
However, ongoing customer demand for new smartphones should provide some cushion in the seasonal slowdown, TPK said.
“We are cautiously optimistic about the fourth quarter,” Liu said. “No significant [correction] is expected.”
Operating margin is to stand at 1 percent this quarter, slightly down from the third quarter’s 1.2 percent, the company said.
“This year overall should look better than we expected at the beginning of the year,” TPK said, adding that it attributes the expected success to winning a larger slice, or 60 percent, of order allocations from its major clients for all of its product offerings.
TPK competes with local rival General Interface Solution Holding Ltd (業成) and China’s O-film Tech Co (歐菲光) for touch solution orders from Apple Inc for iPhones and iPads.
Business prospects for next year remain uncertain as the unresolved US-China trade dispute is expected to affect customers’ shipment schedules, the company said.
TPK said it remains confident about the development of its new silver-nanowire (SNW) technology as Samsung Electronics Co, Huawei Technology Co (華為) and more Chinese vendors prepare to launch foldable smartphones next year.
“One to two models on the market are using our SNW technology,” TPK chief executive officer Leo Hsieh (謝立群) told investors. “We expect to see more next year.”
The flexible nature of SNW film makes it ideal for foldable phones, TPK said, adding that the new orders came after the company started shipping its first SNW commercial product for interactive whiteboards.
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