Largan Precision Co (大立光), a major camera lens supplier for Apple Inc’s iPhones, yesterday said net profit last quarter spiked about 60 percent sequentially thanks to a pickup in demand for new premium smartphones, and the positive momentum would carry through next month.
Net profit surged to NT$5.95 billion (US$185.21 million) in the July-to-September quarter, compared with NT$3.7 billion in the previous quarter, Largan said.
However, on an annual basis, net profit sank about 27 percent from NT$8.14 billion as wobbling economic growth and high inflation dampened demand for upscale smartphones, the company said.
Photo: David Chang, EPA-EFE
The Taichung-based company said earnings per share last quarter jumped to NT$49.6 from NT$27.69 a quarter earlier, but declined from NT$61.01 in the third quarter of last year.
“Demand for high-end smartphones improved a bit,” Largan chairman and CEO Adam Lin (林恩平) told an online investors’ conference yesterday.
He said the market is not as pessimistic as before, though it has not turned totally optimistic.
With high-end smartphone demand gradually catching up, multiple clients are adding new orders for camera lenses, Lin said.
That bodes well for the company’s revenue, which he said would likely increase this month and next month.
Largan should benefit from strong sales of Apple’s iPhone 15 series and Huawei Technologies Co’s (華為) Mate 60 smartphones, TF International Securities Group Co (天風國際證券) analyst Kuo Ming-chi (郭明錤) said last week.
As firms in the smartphone supply chain continue to deal with inventory issues, both phone vendors and component suppliers are seeing their inventories return to healthy levels, Largan said.
However, the company’s gross margin last quarter, dipped to 42.6 percent, hitting the lowest in about a decade, compared with 49.32 percent in the second quarter and 49.34 percent in the third quarter last year. Largan blamed the fall on lower yields and larger price cuts on existing camera lenses.
Last quarter could be the trough as Largan is striving to boost yields rate for its new periscope lens production, while there is scant room for further price cuts, Lin said.
As the demand in smartphone sector has been low for a while, Largan has put off the construction of a new factory in Taichung, the company said.
The construction of the new NT$20 billion factory is to be completed next month, a delay from the company’s original schedule in the first quarter. Largan is in no rush to operate the new factory, given current market demand, Lin said.
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