Delta Electronics Co (台達電) on Monday posted its highest net profit for a second quarter, attributing the performance to growing shipments of power components for servers and automotive electronics, while output of thermal solutions for industrial automation remained steady.
Net profit in the three-month period to June rose 6.8 percent year-on-year to NT$8.15 billion (US$258.6 million), up 17.9 percent on a quarterly basis, the company said in a statement on Monday.
That translated into earnings per share (EPS) of NT$3.14, compared with NT$2.94 a year earlier and NT$2.66 in the previous quarter.
Photo: Fang Wei-chieh, Taipei Times
Second-quarter revenue was NT$100.55 billion, up 11.7 percent year-on-year and 8.3 percent quarterly, meeting market expectations.
Gross margin was 29.2 percent in the second quarter, down from 29.4 percent a year earlier, but up from 27.53 percent in the first quarter, mainly helped by a larger sales scale and earnings improvement for auto electronics.
Due to higher research-and-development expenses, operating margin fell by 0.5 percentage points to 10.23 percent from a year earlier, although it still improved 1.18 percentage points from the previous quarter.
For the first half of this year, Delta reported net profit of NT$15.06 billion, up 10.06 percent year-on-year, or EPS of NT$5.8, as revenue grew 12.1 percent and gross margin improved 0.02 percentage points from the same period last year.
The rapid adoption of generative artificial intelligence (AI) has triggered discussions over rising demand for power supplies for AI servers.
At an investors’ conference yesterday, Delta chairman Yancey Hai (海英俊) said the company expects higher contributions from AI server power supplies next year, as rush orders have continued to pour in and order visibility has extended into next year.
“In the short term, there is a lot of demand,” Hai said, adding that AI server power supplies generated about 15 percent of the company’s revenue from server power supplies.
“With an anticipated increase in AI applications in the future, there would be more AI servers coming,” he said, implying a promising outlook for related power supplies.
The company’s overall performance in the second half of this year is expected to be better than the same period last year, driven by the AI trend, while the business for data center power supplies is likely grow by a double-digit percentage this year, Hai said.
In addition to its AI-related business, the company’s power products for electric vehicles (EV) have also grown this year, Delta chief executive officer Cheng Ping (鄭平) told investors.
“The growth in EV business would probably double this year, in line with our expectations,” Cheng said.
With stable orders from customers, sales of power products for EVs are forecast to continue to grow next year, he added.
Yuanta Securities Investment Consulting Co (元大投顧) is optimistic about Delta's business outlook, saying the company would retain growth momentum this quarter, driven by automotive electronics and AI server-related products.
"For the third quarter, we expect consumer electronics demand to resume a normal seasonal pattern, with EV and server power supply the main drivers," Yuanta said in a note yesterday. "We expect AI server power supply shipment ramp-up in the third quarter and expanding auto electronics segment sales to offset the impact of slower demand in networking, charging stations and industrial automation."
Meanwhile, Delta on Monday announced plans to reconstruct its plant in Taoyuan’s Jhongli District (中壢), at a cost of NT$2.48 billion, as the company aims to optimize its production efficiency.
This story has been updated since it was first published.
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