Wintek revenue short of forecast

Wintek Corp (勝華科技) yesterday announced that revenue last month was lower than expected due to product shipment delays caused by customs difficulties in China.

However, for the lower than expected sales figures to occur at the beginning of the traditional high season raised doubts amongst analysts about whether customs difficulties in China was the full story.

Wintek is a major manufacturer in Taiwan of liquid crystal displays and liquid crystal modules. Its major customers include telecommunications producers such as Motorola and Sagem.

Wintek reported revenue for September of NT$567.3 million. The figure was 34 percent higher than for the corresponding month a year ago, but over 6 percent lower than August's revenue of NT$605 million. The company and market had been anticipating a figure of at least NT$600 million.

January to September revenue came to NT$4.95 billion, up 62 percent on the same period last year.

The lower than expected revenue comes at a time when mobile phone companies have been scaling back predictions for handset sales in the face of lower than expected demand.

Last month, Texas Instruments scaled back its forecast for cellular phone sales this year. In August, wafer manufacturer TSMC said Motorola had lowered forecasts for future mobile phone chip orders because of lower-than expected demand for more expensive handsets.

The knock-on effect of lower phone orders means lower orders for all the components that make the phones. "LCD modules are for handsets," said an analyst at Fubon Securities. "But handset demand is not as high as expected. For Wintek to say revenue was lower because of customs difficulties in China can't be the only reason," he said.

Susie Lee, spokeswoman for Wintek, yesterday said that a slower than anticipated customs process in shipping out modules from its plant in China's Guangdong Province had caused revenue to miss its target.

"It wasn't an order problem," she said. "We had forecast about the same as August; we're not too satisfied because it missed the target, but it's not far off," she said.

Lee predicted that revenue in October should be much stronger and should exceed NT$600 million.

It had better, some analysts say. A failure by the company to meet its target and even reach a record high during what is traditionally the peak season would show that the company's predictions were inaccurate, and that it had been overoptimistic in its original outlook.

The company posted a record high monthly revenue of NT$638 million in April this year.

Earlier in the year, it raised its revenue target for the year to NT$6.72 billion.

Analysts also said September's revenue was affected by the ongoing shortage of LCD drivers. The drivers are used to drive the transistors in an LCD panel.

Their shortage has affected Wintek's revenue figures since the second quarter, and may continue to do so.

Despite the lower than expected revenue figures, Wintek's share price rose almost limit up yesterday.

But that was because the company reported the figures to the Taiwan Stock Exchange a few minutes before the end of trading, analysts said. As a result, they were unlikely to have been a factor in yesterday's trading.

Other factors such as Wintek's imminent global depositary receipt sale were more likely to have been behind yesterday's rise, analysts said. Wintek's stock rose 6.88 percent to close at NT$85.5.