TAIPEI: Largan Precision Co, which supplies camera lenses for Apple Inc’s iPhones, yesterday reported last quarter’s profit, its lowest in the past seven quarters.
Net profit plummeted 18 percent annually and 46 percent quarterly to NT$3.62 billion (US$111.6 million) in the January-to-March period, with earnings per share of NT$27.01, the company said.
Revenue last quarter dropped 22 percent annually and 46 percent quarterly to NT$8.27 billion, affected by declining orders among major clients, Largan chief executive officer Adam Lin told a teleconference.
That Largan lowered its average selling price for some older camera lens models also weighed on the firm’s revenue last quarter, Lin said.
Despite falling revenue, gross margin only dropped by 0.23 percentage points to 59.67 percent last quarter from a quarter earlier, which the company attributed to fewer shipments of camera lenses bundled with voice coil motors.
Largan said it would see flat revenue growth this month and next month.
“April and May’s revenue would be similar to March’s [NT$3.02 billion],” Lin said, adding that the company did not have a forecast for June yet.
Weak demand from major clients is likely to persist this month and next month, while demand from other clients is likely to improve this quarter, he said.
Largan is to begin shipping high-end products from next month or from June to prepare for clients’ new handset launches later this year, Lin said.
In addition, Largan is to ship more dual-camera lens products in the second half of this year, as many clients have adopted the design for new handsets, he said.
Lin said the trend of camera lens specification migration would help raise average selling price for the company’s products this year, although more complicated products tend to drag Largan’s yield at the beginning of production.
However, as several clients have expressed interest in in-house lens production, Lin said the company would need to improve its competitiveness to retain its edge.
Lin said the suspension of construction of a new factory in Taichung is not expected to affect the company’s plan to start mass production at the plant in the first half of next year.
The Taichung City Government on Wednesday ordered that work be suspended at the construction site after two workers died after falls.
Lin said Largan would not resume construction until the contractor ensures safety at the site.
Largan shares yesterday fell 1.25 percent to close at NT$2,375 in Taipei trading, ahead of the firm’s teleconference. The TAIEX gained 0.18 percent.
