Touch module and sensor supplier TPK Holding Co (宸鴻) yesterday gave a dismal revenue outlook for this quarter due to order losses.
Revenue is forecast to slump between 20 and 25 percent from NT$32.85 billion (US$1.14 billion) last quarter, TPK chief strategic officer Freddie Liu (劉詩亮) told investors in a teleconference.
Liu attributed the projected contraction mainly to a dearth of new orders.
Photo: Chen Mei-ying, Taipei Times
“As customers are monitoring how the COVID-19 pandemic will affect sales of end products over the next one to two months, we are conservative about the fourth-quarter outlook,” Liu said. “On top of that, the company is facing a product transition period, meaning new product output will not be as good as before.”
One of TPK’s clients has adjusted its specifications for smartphones and did not place orders for TPK’s touch display lamination services, Liu said.
As a result, TPK expects a continuous decline in revenue from the smartphone segment in the short to medium term, he said.
TPK’s revenue last month dipped 27.2 percent to NT$7.71 billion from NT$10.59 billion in September, and declined 46.7 percent compared with NT$14.48 billion a year earlier, he said.
The smartphone segment is the second-largest revenue source for TPK, making up 34 percent of its total revenue last quarter, a company financial statement showed.
The firm is seeking new business to fill the void over the next few quarters, Liu said.
TPK faces a mounting risk of weakening revenue due to a seasonal downturn, he said.
“The effect of the slow season is usually very severe,” he said.
The company expects to remain profitable this quarter through further improvement in operating efficiency and cost savings, Liu said.
Operating margin is expected to be between 0.5 and 1 percent this quarter, compared with 0.7 percent last quarter, he said.
TPK continues to benefit from growing demand for touch display solutions used in notebook computers and tablets amid remote working and online-learning trends due to the COVID-19 pandemic, TPK chief executive officer Leo Hsieh (謝立群) said.
“The growth momentum for tablets is quite healthy in the fourth quarter, mostly due to the pandemic,” Hsieh said.
The final quarter of the year is usually the peak season for tablets and laptops, he said.
TPK reported that net profit surged about 44 percent quarterly to NT$443 million last quarter, the highest in 10 quarters, boosted by NT$65 million in currency arbitrage gains.
On an annual basis, net profit skyrocketed 93.8 percent from NT$228 million.
Earnings per share jumped to NT$1.09 last quarter from NT$0.76 in the preceding quarter and NT$0.56 a year earlier.
Regular-sized tablets contributed 20 percent to TPK’s revenue last quarter, while notebook computers and larger tablets made up the biggest revenue share of 41 percent, the financial statement showed.
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