Largan posts record-high profits

BRANCHING OUT::Largan Precision is to expand its business by supplying customers in South Korea next quarter, the company’s chief executive officer said

By Helen Ku  /  Staff reporter

Fri, Feb 01, 2013 - Page 13

Largan Precision Co (大立光), which supplies camera lens modules for Apple Inc’s iPhone series, yesterday posted a record-high quarterly net profits for last quarter as an improved yield pushed up its gross margin.

Net income expanded to NT$2.87 billion last quarter, compared with the NT$1.16 billion it posted in the previous quarter and NT$1.16 billion in the fourth quarter of 2011.

That brought the whole year’s net profits to a historical high of NT$5.58 billion.

That was annual growth of 7.3 percent from NT$5.2 billion in 2011.

“Largan’s fourth-quarter net profits beat our forecast,” Birdy Lu (呂家霖), an analyst with Daiwa Capital Markets, said in a research note issued yesterday.

Lu had forecast that Largan would post NT$2.67 billion in net profits.

Beating Lu’s expectation, Largan posted a 45 percent gross margin last quarter, up from 40.7 percent in the third quarter of last year and 39.7 percent in the fourth quarter of 2011, the company’s financial statement showed.

After its peak season, the company gave a conservative outlook for the first two quarters, citing reduced orders from clients.

“Revenues are likely to go down slightly this quarter [from last quarter’s NT$8.58 billion],” Largan chief executive Adam Lin (林恩平) told an investors’ conference yesterday.

Lin attributed the decline to fewer working days due to the Lunar New Year holiday this month and because of reduced orders from clients.

Largan also counts smartphone makers HTC Corp (宏達電) and BlackBerry as major clients.

Lin said he expected pricing and gross margin to remain stable this quarter, backed by rising shipments of high-resolution camera lens modules.

“We believe Largan’s first-quarter gross margin could surprise the market on the upside again because of some of its clients, such as HTC and BlackBerry, are on the rise this quarter with new products being launched,” Lu said.

On the positive side, Lin said the company would start supplying customers in South Korea next quarter and it also plans to ship its first 10-megapixel camera lens.

Currently, 8-megapixel camera lens modules are the firm’s biggest source of revenue, accounting for about half of total revenues, Lin said.

Lin added that the company’s revenues would continue to grow as it plans to ship more new, higher priced products later this year.

“We are very confident that our camera lens module business will continue to grow this year and drive revenue higher,” Lin said.