Largan Precision’s Q1 gross margin of 56.7% beats market expectations
Largan Precision Co. ( ), one of Taiwan’s leading smartphone camera lens suppliers, announced Thursday a gross margin of 56.7 percent for the first quarter of this year, beating market expectations.
In an investor conference held Thursday, Largan said that its first quarter gross margin rose about 6 percentage points from a quarter earlier to hit a new high in four quarters.
“I am impressed by Largan’s latest gross margin,” Mega International Investment Services Corp. analyst Alex Huang said, adding that his brokerage had previously forecast that the first quarter figure would stay little changed from a quarter earlier.
“The camera lens maker has benefited from an improvement in its product portfolio in which high-end products comprised a large percentage of sales, thus boosting the profit margin,” Huang said. “The high margin showed that Largan still leads its peers in smartphone camera lens production technology.”
Largan said that it posted NT$ 4.41 billion in net profit for the January- March period, up 47 percent from a year earlier, while the first quarter figure fell 41 percent from the previous quarter due to slow season effects.
In the first quarter, Largan posted NT$32.86 in earnings per share (EPS) for the first quarter of this year, also beating a previous market estimate. The first quarter figure rose from NT$22.36 recorded in the same period of last year but fell from NT$55.4 registered in the previous quarter.
Largan’s first quarter EPS was the third highest in company history, only trailing the NT$55.40 high recorded in the fourth quarter of last year and the NT$39.40 mark registered in the third quarter of last year.
In the first quarter, 10- megapixel lenses accounted for 20-30 percent of its total sales, 8-megapixel lenses made up 40- 50 percent, 5- megapixel lenses represented 10-20 percent, and 1- megapixel lenses accounted for 10-20 percent, Largan said.
During this period, Largan’s consolidated sales t otaled NT$10.57 billion, up 54 percent from a year earlier but down 37 percent from a quarter earlier.
Largan CEO Adam Lin ( ) told investors that with the slow season effects beginning to fade in the first quarter, the company will see its sales growth pick up in the second quarter.
Before t he results were released, shares of Largan rose 1.46 percent to close at NT$ 2,785.00 on the Taiwan Stock Exchange. The stock is the most expensive in the local market.