Coretronic Corp (中強光電), which makes backlight modules for flat panels, yesterday gave a conservative outlook after reporting that net profit fell by 35 percent year-on-year to NT$479 million (US$15.7 million) last quarter, translating into earnings per share of NT$1.08.
Revenue last quarter fell 13 percent year-on-year to NT$12.99 billion, which the Hsinchu-based company attributed to a global slowdown exacerbated by US-China trade tensions, Coretronic president Chen Shih-yuan (陳士元) told an online investors’ conference.
Gross margin fell slightly year-on-year to 18.5 percent from 20 percent last year due to foreign-exchange losses and a relatively poor product mix, Coretronic chief financial officer Franck Ho (何新斌) said.
Nevertheless, the company managed to lower its operating expenses by 10.2 percent year-on-year thanks to reduced management and marketing costs, Ho said.
Coretronic’s electronics manufacturing services business remains its largest contributing segment, but the company is also developing its visual solutions business.
However, the visual solutions business contributed 19 percent to the company’s overall revenue last quarter, down from 21 percent a year earlier, after the segment’s revenue decreased 30.24 percent year-on-year to NT$3.65 billion last quarter, company data showed.
“We have faced strong pricing competition in the flat-panel market,” Chen said, referring to the visual solutions business.
Weak market demand for mainstream projectors also contributed to the decline, Chen said.
Despite a decrease in the sale of lamp-based projectors, which made up 44 percent of the segment’s sales, Chen said he expects the segment to recover this quarter through stable demand for solid-state lighting, large-venue applications and embedded solutions.
The company’s Tainan plant is to start production by the first half of next year, with a long-term goal of becoming a smart manufacturing facility, Chen said.
Coretronic is betting big on its energy savings business, whose revenue increased 30 percent quarter-on-quarter to NT$6.97 billion.
“We shipped 11.48 million units [of energy savings products] last quarter, an increase of 21 percent [quarter-on-quarter],” Coretronic energy savings business group president Sarah Lin (林惠姿) said, attributing the increase to strong demand for television and laptop applications from customers in South Korea, Europe, the Middle East and Africa.
The company expects a 5 percent decrease this quarter from last quarter in its electronics manufacturing services business and another 10 percent decrease in its original design manufacturing business, which contributed 19 percent to overall revenue last quarter.
The overall number of shipments this quarter is also expected to decline quarter-on-quarter by a single-digit percentage, Lin added.
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