Passive components maker Yageo Corp (國巨) yesterday reported that its second-quarter earnings surged to the highest level in about one-and-a-half years, thanks to rising demand for high-capacity passive components used in 5G smartphones, servers and computers.
Net profit jumped 40 percent to NT$3.3 billion (US$111.75 million) during the April-to-June period, compared with NT$2.35 billion in the first quarter and NT$1.42 billion a year earlier.
Earnings per share climbed to NT$7.01, from NT$5.51 a quarter earlier and NT$3.34 a year earlier.
Gross margin rose to 44.3 percent, compared with 40.3 percent in the first quarter and 32.6 percent in the second quarter of last year.
Yageo, the world's third-largest supplier of multilayer ceramic capacitors, said that it managed to boost its inventory to 60 days at the end of the second quarter to satisfy customer demand, compared with 30 days in the first quarter.
However, that is still well below a “healthy” inventory for the company, which is 100 to 110 days, it said.
For this quarter, the firm remains positive, despite the COVID-19 pandemic and US-China trade tensions, saying that revenue and profit would continue to trend upward due to the integration of newly acquired Kemet Corp and solid customer demand.
Kemet specializes in making passive components used in high-end 5G base stations, automobiles, industrial and aerospace applications, and medical devices.
The Kemet deal increased Yageo’s revenue 54.4 percent month-on-month to NT$7.01 billion last month.
The deal would help drive Yageo’s revenue higher this quarter by at least 50 percent from NT$10.02 billion last quarter, analysts said.
In the first six months of this year, Yageo accumulated NT$5.65 billion in net profit, surging more than 40 percent from NT$4.01 billion a year earlier, while revenue grew 12 percent from NT$20.97 billion to NT$23.49 billion.
Smaller rival Walsin Technology Corp (華新科技) on Monday posted net profit of NT$1.93 billion for last quarter, almost tripling the NT$693.93 million it made in the first quarter. On an annual basis, net profit grew 31.29 percent from NT$1.47 billion.
Earnings per share were the highest they had been in five quarters, at NT$3.98, compared with NT$1.35 a quarter earlier and NT$3.03 a year earlier.
Walsin said that it expects strong demand from laptops thanks to remote learning and telecommuting trends to extend into the second half of the year, while smartphone demand is rebounding after its first-half doldrums.
In the first two quarters, Walsin’s net profit fell more than 31 percent to NT$2.59 billion from NT$3.78 billion, and revenue dropped 6.25 percent to NT$15.16 billion from NT$16.17 billion a year earlier.
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