Largan Precision Co (大立光) yesterday reported a year-on-year net profit decrease of about 26 percent for last quarter, after gross margin slid further to the lowest level in about 6 years.
Net profit fell to NT$5.13 billion (US$185.55 million), compared with NT$6.96 billion a year earlier and down 2.4 percent from NT$5.26 billion the previous quarter, the handset camera lens supplier for Apple Inc said.
Earnings per share were NT$38.22 last quarter, down from NT$51.87 a year earlier and NT$39.22 a quarter earlier, it said.
Photo: David Chang, EPA-EFE
Gross margin dipped to 55.86 percent last quarter, from 64.42 percent in the final quarter of 2020 and 59.26 percent from the previous quarter, Largan said, attributing the trend to an unfavorable camera lens portfolio and higher shipments of lower-margin voice coil motors.
For last year as a whole, Largan’s net profit fell 24 percent to NT$18.66 billion from NT$24.53 billion in 2020, or earnings per share falling to NT$139.13 from NT$182.9, it said.
The Taichung-based company said it did not expect the situation to improve significantly in the near term, giving a lackluster outlook for this quarter, as it expects customers to only slowly adopt high-end lenses after encountering disappointing demand for premium smartphones last year.
“January seems to be a weaker month than December, as it is traditionally a slow season. February could be even worse,” Largan chief executive officer Adam Lin (林恩平) told an investors’conference.
“Supply constraints remain an issue.”
Largan said it is seeing a broader customer base for high-end 8-piece plastic camera lenses, but customers are apparently holding back on using such lenses in their premium models, given poor unit sales.
Most customers are to introduce new models equipped with such high-end lenses in the second half of this year, Lin said.
Largan said it is expanding VCM capacity to meet customer demand, with a new factory to become operational in the second half of next year.
With core mobile phone camera lenses falling in the doldrums, Largan is seeking to expand its business reach to camera lenses for vehicles, and virtual reality and augmented reality devices, but those new businesses are at a nascent stage.
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