Delta Electronics Inc (台達電), the nation’s leading power and thermal solutions provider, yesterday said that gross margin last quarter hit a record high, as the company benefited from the work from home and remote learning trends.
Investor relations officer Rodney Liu (劉致遠) credited the record gross margin of 32.9 percent to Delta’s superior product offerings.
That compared with a gross margin of 26.48 percent in the first quarter and 26.99 percent in the same period last year.
Photo: Chen Jou-chen, Taipei Times
“We have been offering high-quality and high-margin products, combined with good cost control,” Liu told a news conference in Taipei.
Higher passive component prices and new applications such as 5G devices should help the company sustain its high margins, Delta chairman Yancey Hai (海英俊) said.
“While Apple Inc’s 5G phone is not yet ready, other companies are launching their 5G devices,” Hai said.
Rising trends in automation, electric vehicles and 5G heat management components also work in the company’s favor, he added.
However, Hai said he does not expect the strong demand for work from home products to continue indefinitely.
“After each household gets their laptops, they are not going to need more,” he said. “However, there will be periodic upgrades for better equipment and more screens down the line.”
Delta’s revenue last quarter was NT$70.7 billion (US$2.4 billion), up 27 percent from the first quarter, but down 4 percent from a year earlier.
Operating profit surged 368 percent quarterly and 73 percent annually to NT$9.3 billion last quarter, while net profit jumped 268 percent from the previous quarter, but declined 20 percent from a year earlier to NT$7.6 billion.
Earnings per share rose to NT$2.92, up from NT$0.80 last quarter, but down from NT$3.67 a year earlier, the company said.
Delta’s operations are composed of: power electronics, including embedded power supplies, components and thermal management solutions; automation, mainly industrial automation services; and infrastructure, covering information infrastructure, energy infrastructure and industrial solutions.
By segment, 54 percent of Delta’s sales came from power electronics, 15 percent from automation and 31 percent from infrastructure, the company based in Neihu District (內湖) said.
Revenue from power electronics and automation increased 4 percent and 6 percent respectively from a year earlier, while that from infrastructure dropped 18 percent, it said.
For the first half of this year, Delta’s revenue slid 1 percent year-on-year to NT$12.64 billion, while net profit fell 25 percent to NT$970 million.
“We expect the third quarter to be even better than the second quarter revenue-wise, but it is hard to say how the fourth quarter would turn out as there are so many uncertainties,” Delta CEO Cheng Ping (鄭平) said, adding that the company aims to keep gross margin above 30 percent this quarter.
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