Largan Precision Co (大立光), a supplier of smartphone camera lenses for Apple Inc’s iPhones, yesterday reported its weakest quarterly net profit in three quarters and warned of slow months ahead.
Net profit fell 21 percent to NT$5.32 billion (US$187.13 million) in the first three months of this year, compared with NT$6.72 billion in the same period last year, it said.
On a quarterly basis, net profit fell 32.6 percent from NT$8.57 billion. That translated into earnings per share of NT$39.62, down from NT$50.1 a year earlier and NT$5.87 in the fourth quarter last year.
Photo: David Chang, EPA-EFE
Gross margin fell to 64.72 percent last quarter from a year earlier, which was an improvement from 64.42 percent in the previous quarter.
“In terms of orders, this month is going to be worse than last, and next month would not be so great either,” Largan CEO Adam Lin (林恩平) told a virtual investor conference yesterday.
A shortage of certain high-end sensor components is to blame for the drop in orders, and the effect would likely continue for a quarter, although not all products are affected, Lin said.
“The component shortages are limited to the high-end products of certain customers. The problem is the production lines for these high-pixel sensors will take a season to rebuild,” Lin said. “The orders will be delayed, but not canceled altogether.”
Technical challenges lie ahead for future camera lens products, he added.
“Everybody wants thinner products with higher pixel counts, but every step of the production process is a challenge,” he said.
When asked about the automotive lens market, Lin said that Largan is maintaining customers and would “consider new orders if there is a reasonable gross margin.”
As for the application of optical lenses in augmented reality, he said that it was up to customers to innovate.
“As a component supplier, we will make what the customers ask for. We will participate in the development of new products, but it is not really our place to say too much about it,” he said.
Last month, it settled a nine-year lawsuit with smaller rival Ability Optoelectronics Technology Co (先進光電). License fees and damages from the suit would contribute to Largan’s profits, but the exact figure would not be disclosed, Lin said.
As for whether the two companies will be working together in the future, Lin said: “Probably not for now.”
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