Casetek Holdings Ltd (鎧勝) shares closed 1.44 percent lower on the Taipei Exchange yesterday after the metal casing company reported weaker-than-expected earnings for last quarter.
The stock plummeted as much as 3.84 percent, but slowly recouped part of its losses to close at NT$102.5, with sell orders of 174,000 shares pending to execute in the next session.
Casetek, a subsidiary of Pegatron Corp (和碩), supplies metal casings for Apple Inc’s iPads and MacBooks.
Net income plunged 16.13 percent annually to NT$373.76 million (US$12.37 million) last quarter, despite year-on-year revenue growth of nearly 20 percent on strong shipments of new tablet products, Casetek said in its latest financial statement released on Thursday.
The result missed the market’s net income consensus estimate of NT$595 million by 37.18 percent.
Earnings per share were NT$1.1 compared with last year’s NT$1.28 and the market’s estimate of NT$1.78.
Casetek’s gross margin dropped 13.9 percent last quarter — contracting by 2.68 percentage points from last year and 2.13 percentage points from the previous quarter — to the second-lowest level since the company was listed on the Taipei Exchange in 2013. It also missed the market’s forecast of 18.9 percent.
The company attributed the poor gross margin performance to lower initial yield for new tablets and a less favorable product portfolio.
Analysts said the lower-than-estimated gross margin was also due to Apple’s lower pricing for some iPads, which weighed on Casetek’s profitability.
“The low pricing of the 9.7-inch iPad had the most significant effect on Casetek’s gross margin performance,” KGI Securities Co (凱基證券) analyst Angela Hsiang (向子慧) said in a client note issued on Thursday.
KGI forecast that Casetek’s revenue would expand 8 percent this quarter from last quarter’s NT$7.81 billion — lower than its previous estimate of 14 percent — due to a potential shortage of key components, such DRAM chips and passive components, Hsiang said.
HSBC Securities Taiwan Corp Ltd analyst Carrie Liu (劉瓊芳) said in a client note that the firm’s gross margin this quarter would improve to 19 percent on the back of yield improvement and increasing sales amid a peak season.
Casetek’s new business supplying side keys for Apple’s 4.7-inch iPhones, which is to begin this quarter, is expected to generate a limited near-term revenue contribution in the second half of this year, Liu said.
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