Audio electronics maker Merry Electronics Co (美律) expects earnings to begin improving next quarter as it taps into the growing popularity of “true wireless” earbuds and other higher-tier product segments.
The company on Wednesday said in an earnings teleconference that it expects to see continued growth in shipments of gaming and noise-canceling headphones, true wireless earbuds and smartphone speakers this quarter, after ending the final quarter of last year with record-high revenue of NT$13.39 billion (US$435.1 million).
Revenue would have been higher, but there was pressure from component shortages, delayed deliveries and lukewarm smartphone sales, it said.
This year, the company said that it aims to weather the first-quarter slow season and end the period in the black with much better profitability after recording a net loss of NT$632 million a year earlier.
Gross margin, which fell to 9.3 percent at the end of March last year, had climbed to 9.67 percent, 15.7 percent and 14.5 percent respectively in the subsequent three quarters, company data showed.
Merry Electronics would be more selective of brands in the true wireless market and focus on securing orders from the high-end segment as opposed to pursuing the best prices, company spokesman Allen Huang (黃朝豊).
After acquiring a majority stake in Austar Hearing Science and Technology (Xiamen) Co Ltd (歐仕達聽力科技廈門), Merry Electronics is doubling down on the hearing aid market, as it on Tuesday announced that it would take a 94.2 percent stake in Biotest Medical Corp (衡欣醫材), a Taichung-based manufacturer.
Bouncing off a low basis set last year, shipments could rise 80 percent annually and lead to a 72 percent annual rise in revenue this quarter, Merry Electronics said.
Meanwhile, the profitability of its Chinese operations, a major factor affecting its bottom line, is expected to improve throughout this year as their scale expands, the company said, adding that it booked NT$323 million in gains from operations in Huizhou, Suzhou and Dongguan in the final quarter of last year.
The company reported that net income last year dropped 43 percent annually to NT$2.06 billion, while revenue rose 33 percent to NT$35.5 billion.
Gross margin fell 4.16 percentage points to 13.31 percent, with operating margin falling 3.15 percentage points to 6.39 percent.
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