Yageo Corp (國巨), which makes passive components, on Tuesday reported that net profit for last quarter increased 80 percent from a year earlier and 10.1 percent from the previous quarter to NT$3.63 billion (US$125.91 million).
Earnings per share (EPS) were NT$7.37, the highest in the past seven quarters, the company said in a statement.
The strong earnings came after Yageo, the world’s No. 3 multilayer ceramic capacitor (MLCC) supplier, posted a revenue rise of 112.8 percent annually to NT$21.95 billion, the highest in eight quarters, while gross margin rose 6.4 percentage points to 37.4 percent and operating margin moved up 8.9 percentage points to 25.1 percent.
Photo: Chang Hui-wen, Taipei Times
Yageo attributed the strong third-quarter results to synergy with US-based Kemet Corp, a US$1.64 billion acquisition, as well as a gradual improvement in production and capacity utilization, and stable demand from end customers.
However, non-operating items posted a net loss of NT$675 million, including foreign exchange losses of NT$609 million due to the appreciation of the New Taiwan dollar against the US dollar.
The foreign exchange losses cut its earnings by NT$1.24 per share last quarter, hinting that it could make more money if there were no NT dollar appreciation, the company said.
In the first three quarters of this year, net profit expanded 55.5 percent year-on-year to NT$9.27 billion, or EPS of NT$20.03, while cumulative revenue grew 45.2 percent to NT$45.45 billion, the company said.
Gross margin and operating margin improved to 40.1 percent and 27.3 percent respectively, it said.
Yageo said that it remains confident it would achieve stable revenue and profitability growth.
“The multiple demands for customized high-end specialty products in coping with future technologies will eventually maximize the company’s value in high-end automotive, industrial, medical, aerospace, 5G and Internet of Things segments,” it said.
As the global COVID-19 pandemic has not eased and the uncertainty of international trade disputes remains high, Yageo has gradually increased capacity utilization for MLCCs and chip resistors, while running at full capacity for tantalum capacitors in a bid to meet steadily increasing market demand, it said.
A sales breakdown showed that MLCCs accounted for 27 percent of the company’s sales last quarter, followed by tantalum capacitors (24 percent) and chip resistors (17 percent), JPMorgan Securities Ltd said in a note on Tuesday.
Yageo’s revenue for this quarter is forecast to decline by less than 5 percent from last quarter thanks to seasonal demand, JPMorgan said, adding that tantalum capacitors would continue to drive the company’s sales momentum.
“Tantalum capacitors are seeing surging demand from the rollout of new generations of products by the graphics processing unit [GPU] vendors, plus the launch of new game consoles,” JPMorgan said.
“These new GPUs and game console processors utilize a lot more tantalum capacitors than the previous generations,” it said. “We expect the tantalum utilization rate to remain at a very high level in the fourth quarter.”
ARIZONA PROJECT: A spokeswoman said that TSMC appreciates the support from US authorities, which gives it and its partners confidence about future investments City officials in Phoenix, Arizona, on Wednesday approved a slate of financial incentives and government support for Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) planned US$12 billion chip plant, a step toward bringing high-tech manufacturing to the US and addressing national security concerns over the industry supply chain. The city agreed to provide about US$200 million to develop roads, sewers and other infrastructure, according to a notice from the city council. At least one additional set of traffic lights would be included for a cost of approximately US$500,000. The company is conducting due diligence on several locations in Phoenix with a final decision to
HARD ASK: At a meeting held by the MOEA to talk about the RCEP trade deal, trade associations said that they expect the government to push for more free-trade deals Business representatives yesterday urged the government to slow the appreciation of the New Taiwan dollar, saying that some Taiwanese industries have been undercut by rivals due to unfavorable foreign exchange rates. The government should also assist local industries to expand their domestic market, and push for more bilateral trade deals so that Taiwanese companies can enjoy zero or preferential tariffs on exports, following the nation’s exclusion from the Regional Comprehensive Economic Partnership (RCEP) which was signed by 15 Asia-Pacific nations on Nov. 15, they said at a meeting with the Ministry of Economic Affairs (MOEA). Some participants said that the NT dollar’s
A.P. Moller-Maersk A/S is planning to launch a US$1.6 billion share buyback program as the world’s biggest container shipping company weathers the COVID-19 crisis better than expected. Copenhagen-based Maersk, which on Tuesday raised its guidance for a second time since last month, reported a 39 percent rise in earnings before interest, taxes, depreciation and amortization to US$2.3 billion in the third quarter. Profit by that measure, before restructuring and integration costs, would reach US$8 billion to US$8.5 billion this year, the company said. Its previous guidance was for US$7.5 billion to US$8 billion. “The global economic environment was [in the third quarter]
OPPORTUNITY: After Huawei said it would sell a sub-brand, potentially exempting it from the US ban, the Hsinchu-based chipmaker eyes the chance to boost sales in China MediaTek Inc (聯發科) yesterday became the nation’s second-most valuable listed company after its market capitalization climbed to NT$1.157 trillion (US$40.23 billion) amid investors’ optimism of new business opportunities, while Hon Hai Precision Industry Co (鴻海精密), a major assembler of Apple Inc’s iPhones, fell one notch to third with a market capitalization of NT$1.153 trillion. The increase in MediaTek’s value came as its shares rallied 4.6 percent to close at NT$728 yesterday, as investors expected the handset chip supplier to benefit from Huawei Technologies Co’s (華為) decision to sell its low-to-mid-range smartphone business under the Honor (榮耀) sub-brand. On Tuesday, Huawei announced