Everlight Electronics Co (億光電子), the nation’s top LED chip packager, on Wednesday reported first-quarter net profit declined 53.01 percent quarter-on-quarter and 24.31 percent year-on-year to NT$414.61 million (US$13.73 million).
The results were below analysts’ consensus estimate of NT$435.02 million.
Earnings per share (EPS) were NT$1 during the January-to-March period, compared with NT$0.88 a quarter ago and NT$0.53 a year earlier, according to the company’s filings with the Taiwan Stock Exchange. Analysts estimated NT$1.04 in EPS.
“Everlight’s EPS were supported by the company’s increased LED backlight module shipments last quarter, which also helped boost its margin,” Primasia Securities Co analyst Filia Lin said by telephone.
Everlight’s gross margin rose to 25.65 percent in the first quarter, from 23 percent during the same period last year, compared with Primasia’s estimate of 24.7 percent.
The Shulin District (樹林), New Taipei City-based company did not elaborate on its results for last quarter, but Lin said Everlight disclosed its shipments and sales of LED backlight modules outgrew those of LED lighting items during the first three months of the year.
Citing information disclosed by the firm’s management, Lin said sales of backlight modules used in TVs and consumer electronics increased, accounting for 55 percent of Everlight’s total sales last quarter, from 48 percent the previous quarter.
Backlight modules yield higher margin — between 25 and 30 percent — than lighting items such as LED bulbs and lamps, which carry ever-decreasing average selling prices, Lin said.
Sales of lighting products accounted for about 19 percent of Everlight’s total sales last quarter, down from a 27 percent share during the fourth quarter of last year, mainly because of seasonal factors, she added.
“Our channel checks indicate that demand for TVs from China is still strong, and demand for handsets is picking up because of seasonality and launches of new models,” Lin said. “The growing demand for backlight modules should help Everlight sustain its gross margin and profitability in the short term.”
In terms of LED backlight modules, Everlight counts Taiwanese panel maker AU Optronics Corp (AUO, 友達光電) and contract TV maker AmTran Technology Co (瑞軒), as well as South Korea’s Samsung Electronics Co and LG Electronics Inc, as its major clients.
Lin said Everlight in the long run may face greater pricing pressure when selling LED lighting products in China, as the company’s major Chinese rivals Opple Lighting Co Ltd (歐普照明) and NVC Lighting Technology Corp (雷士照明) have banned their distribution partners from selling Everlight’s products there.
Other downside factors for Everlight’s profitability include the company’s control over its advertising spending, which is crucial to the company, as it is striving to become an internationally renowned LED lighting product brand, she said.
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