Largan Precision Co (大立光), the nation’s leading camera lens manufacturer, yesterday gave a bleak outlook for this quarter due to the uncertainty engendered by the COVID-19 pandemic, after posting its strongest-ever first-quarter net profit, which surged 32.97 percent year-on-year to NT$6.72 billion (US$222.87 million).
This figure translated into earnings per share of NT$50.1, up from NT$37.68 a year earlier.
Revenue last quarter increased 34.52 percent to NT$13.21 billion.
Gross margin climbed to 69.8 percent from 64.24 percent, thanks to an improved product mix, as well as higher average selling prices (ASP), the company said.
A shipment breakdown showed that 10 to 20-megapixel lenses accounted for 40 to 50 percent of the total, 20-megapixel lenses and above made up 20 to 30 percent, and 8-megapixel lenses constituted about 10 to 20 percent.
Despite a strong first quarter, the company said that uncertainty created by the pandemic would take a toll on its revenue this quarter.
“We expect April [revenue] to disappoint [compared with March sales], with May [sales] even worse,” Largan CEO Adam Lin (林恩平) told investors at an earnings conference, adding that the firm has no order visibility for June.
This would lead to a drop in capacity utilization rates, Lin said, but added that the projections are based on current client orders, which could change rapidly depending on market conditions.
Asked whether Largan could meet rush orders when the pandemic subsides, Lin said it could ramp up production within one to two weeks time as long as the necessary modules are already available.
“Our employees are still working full time,” he added.
As to market speculation about potential delays in customers’ product launches, Lin declined to comment, but said that some of Largan’s projects would indeed be affected by laboratory closures.
Lin said Largan might shift more production to low to mid-range lenses, but said this might undermine margins given a lower ASP.
Largan is developing free-form lenses, which reduce spherical aberrations that occur in conventional camera lenses, Lin said, adding that it would be available by the end of the year.
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