Largan’s net profit in the third quarter reaches the highest level in two years

CAREFUL PERSPECTIVE:
As concerns about iPhone 16 sales grow, this month’s revenue would be flat and next month’s would be lower, said Chief Executive Adam Lin

• By Chen Cheng-hui / Staff Reporter

Largan Precision Co (大立光) yesterday reported that its net profit for the last quarter reached the highest level in eight quarters, driven by strong demand for smartphone camera lenses and improving gross margin, but the company offered a cautious outlook for this quarter.

The country’s largest maker of cellphone camera lenses said third-quarter net profit rose 11.4% from a year earlier and rose 47.4% from the previous quarter to NT$6.63 billion (U.S. $206.1 million).

This translated into earnings per share of NT$49.67, beating the NT$44.44 consensus estimate from a Yahoo Finance analyst survey and marking the highest level in two years.

Photo by: Ou Yu-hsiang, Taipei Times

Largan’s revenue was also a record for the same period, increasing 39.04% year-on-year to NT$18.95 billion in the last quarter, thanks mainly to Apple Inc.’s launch of the iPhone 16 series.

Largan and local rival Genius Electronic Optical Co (玉晶光) are two of Apple’s biggest camera lens suppliers.

The company’s gross margin reached 50.22% last quarter, up from 42.56% a year ago, comfortably surpassing the company’s guidance.

Lenses with a resolution of 20 megapixels or more—a higher-margin product and one of Largan’s specialties—accounted for 10 to 20 percent of the company’s sales last quarter, and those with 10 to 20 megapixels accounted for 60 to 70 percent. of sales, while 8 to 10 megapixel lenses accounted for about 10%. Other products, such as voice coil motors, accounted for 20 to 30 percent of sales, the company said.

During the first three quarters of this year, Largan’s net profit increased 31.96% to NT$17.24 billion from NT$12.94 billion in the same period last year, with earnings per share rising to NT$ 129.16, from NT$96.93, while revenue grew 33.23%, to NT$41.25. billion and gross margin increased by 3.09 percentage points to 49.45 percent, it said.

The strong results came after market research firm International Data Corp reported on Monday that despite macroeconomic concerns, global smartphone shipments last quarter rose 4% year over year to 316.1 million units, the fifth consecutive quarter of growth.

Meanwhile, another research firm, Canalys, in its calculations, also released on Monday, pegged the increase for the same period at 5 percent, attributing the growth to continued demand for replacement.

As the world economy is not doing well and concerns about iPhone 16 sales are increasing, the company’s revenue this month would be flat compared to last month, and next month’s revenue would be lower than this month, said the CEO of Largan, Adam Lin (林恩平). he said at an online investor conference, without offering exact numbers.

“Demand in the fourth quarter is not looking good. It will be much worse than the third quarter,” Lin said, citing customer order cuts and the entry of new competitors.

However, the factory utilization rate in the fourth quarter is expected to be similar to that in the third quarter, he said, adding that the company’s production facilities in Taichung are fully loaded and a larger factory will be completed in September next year for smartphone cameras. lens production.