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Largan reports monthly drop of more than 19% in December sales

2019/01/05 16:08:34

Taipei, Jan. 5 (CNA) Taiwan-based smartphone camera lens maker Largan Precision Co., one of the major suppliers to Apple Inc., reported Saturday a monthly decline of more than 19 percent in its sales for December 2018, citing weaker global demand.

In a statement, Largan said its consolidated sales last month were NT$3.23 billion (US$105 million), the lowest since March 2018 when they stood at NT$3.14 billion.

The figure was a 19.49 percent drop from November and a 33.86 percent decline from a year earlier.

Largan said its 20 megapixel lenses and higher end models, which command higher prices, accounted for 10-20 percent of its total sales last December, while its 10 megapixel lenses made up 60-70 percent, and 8 megapixel lenses 10-20 percent.

Market analysts attributed the decline in the company's December sales to disappointing shipments of the latest iPhones released in September 2018, saying that Apple has been cutting back on orders to its suppliers amid lower than expected demand.

For the October-December period, Largan's consolidated sales fell 23.8 percent from a quarter earlier and 22.64 percent from a year earlier to NT$12.45 billion.

It was the company's lowest quarterly figure for the fourth quarter in eight years, although the fourth quarter is usually a peak season for the consumer electronics industry.

For the whole of 2018, Largan recorded consolidated sales of NT$49.95 billion, an annual decline of 5.98 percent.

In its forecast for January, Largan said its revenue is expected to change little from December.

Largan's January estimate followed Apple's sales projection on Jan 2 for the first quarter of 2019, in which it lowered its forecast from US$89-US$93 billion to $84 billion, citing weaker demand in China.

Since then, Largan shares have dropped 5.07 percent, sliding 4.13 percent on Friday alone to close at NT$2,905.00 and falling below NT$3,000 for the first time since July 11, 2016, when they ended at NT$2,990.00.

On Friday, the weighted index on the Taiwan Stock Exchange plunged 109.91 points, or 1.16 percent, to end at 9,382.51, led by Largan, the most expensive stock on the local market, and other heavyweight "Apple concept stocks."

One of the major large-cap stocks on the local equity market, Largan's performance is expected to influence the movement of the broader market, analysts said. Largan has scheduled an investor conference for Jan. 10 to detail its results for the fourth quarter of last year and give guidance for the first quarter of 2019.

In the first nine months of last year, Largan posted NT$17.89 billion in net profit, up 3 percent from a year earlier, with earnings per share of NT$133.38.

(By Tien Yu-pin and Frances Huang)