Largan sales hit 8-month high in September

Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., said on Tuesday that its sales for September hit the highest level in eight months, with market analysts attributing the growth to an increase in orders from the American consumer electronics giant.

With Apple's latest iPhone 13 series hitting the global market in late September, Largan posted NT$4.17 billion (US$149 million) in consolidated sales in the month, up about 4 percent from August, the company said in a statement.

The September sales figure was the highest since January, when the company's revenue reached NT$4.61 billion.

However, September sales fell 19 percent from a year earlier and analysts said the decline largely reflected the sanctions imposed by the United States on China's telecom equipment supplier Huawei Technologies Inc., which went into effect in mid-September 2020.

In the third quarter of this year, Largan's consolidated sales totaled NT$11.98 billion, up 18 percent from the first quarter but down 19 percent from a year earlier.

In the first nine months of this year, Largan saw its consolidated sales fall 17 percent from a year earlier to NT$33.91 billion.

Analysts said the year-on-year sales decline for the third quarter and the nine month period provide further evidence about the impact of the sanctions faced by Huawei.

In September, lenses 20 megapixels and over, which have a higher profit margin, accounted for 10-20 percent of Largan's total sales, according to the statement.

Those with 10-20 megapixels accounted for 40-50 percent of the company's sales, and 8-10 megapixel lenses made up about 10 percent, while other products such as voice coil motors contributed 20-30 percent, the statement showed.

Largan said it expects sales in October to remain little changed from September.

The company has scheduled an investor conference for Thursday to detail its third quarter results and provide guidance for the fourth quarter.

Analysts said Largan could report a gross margin -- the difference between its revenue and cost of goods sold -- of less than 60 percent for the third quarter, down from 60.3 percent in the second quarter, despite the sequential increase in sales.

The company said the expected fall in gross margin comes after Apple adopted only a limited upgrade to the camera lens on the new iPhones.

Largan shares closed down 3.04 percent at NT$2,070.00 on the Taiwan Stock Exchange Tuesday, the lowest level in five years and eight months.

Source: Focus Taiwan News Channel