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Largan Q3 net profit up 70%

Largan Q3 net profit up 70%

Taipei, Oct. 15 (CNA) Largan Precision Co. (???), a smartphone camera lens supplier to Apple Inc., said Thursday that it enjoyed a 70 percent sequential increase in net profit for the third quarter, with market analysts attributing the growth partly to a falling Taiwan dollar. In addition to an increase in orders from Apple for its new iPhone models, "Largan benefited from foreign exchange gains in the third quarter, when the local central bank continued its intervention efforts to keep the local currency cheaper," Hua Nan Securities analyst Kevin Su said. "Largan was one of the local high-tech device exporters whose bottom lines got a boost from foreign exchange gains in the third quarter," Su said. In the third quarter, the Taiwan dollar fell 6.62 percent against the U.S. dollar amid hopes of a rate hike by the U.S. Federal Reserve. "However, expectations of any immediate rate hike cycle in the U.S. have been reduced, and the Taiwan dollar has started to regain momentum. I doubt that local electronics firms will enjoy strong foreign exchange gains in the fourth quarter," Su said. During the July-September period, Largan posted NT$8.21 billion (US$254 million) in net profit, up about 70 percent from NT$4.82 billion recorded in the second quarter. The third-quarter net profit was the highest in the company's history. Largan's earnings per share (EPS) for the third quarter stood at NT$61.17, a quarterly record high, up from NT$35.96 recorded in the previous quarter. The third-quarter EPS beat an earlier market forecast of about NT$59. Despite the spike in net profit, Largan witnessed its gross margin for the third quarter falling 2.61 percentage points from a quarter earlier to 57.71 percent. Su said that the decline reflected a relatively lower yield rate of new products and an increase in labor expenses. In the third quarter, as the new iPhones unveiled in early September use 12-megapixel lenses -- an upgrade from the 8-megapixel lenses used by their predecessors -- Largan said high-end lenses serve as the driver of its growth. In the quarter, 10-megapixel lenses or more advanced models accounted for 40-50 percent of Largan's total sales, which stood at NT$16.09 billion, while 8-megapixel lenses made up 20-30 percent of the total revenue. In the first nine months of this year, Largan posted NT$17.44 billion in net profit, up 45.22 percent from a year earlier, with EPS of NT$129.99. Looking ahead, Largan said that sales momentum will continue to grow in October from September, based on the current order backlog, while sales in November are expected to stay little changed from a month earlier. (By Tien Yu-pin and Frances Huang)


Updated : 2021-09-21 13:28 GMT+08:00