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MediaTek first-quarter profit declines 13 percent from Q4

Saturday, April 28, 2012
The China Post news staff


MediaTek, a leading integrated circuit (IC) designer, yesterday reported first-quarter net profit of NT$2.5 billion, the lowest in nearly a decade.

The figure, translating into earnings per share of NT$2.19, was made on sales of NT$19.615 billion, a decline of 13 percent from Q4 2011.

The firm attributed the sales decline to weakening demand for certain end-user products as well as a reduction in price, despite robust business from the smartphone and digital TV sectors.

Gross profit margin for the first three months was 42.1 percent, a decline of 2.1 percent from the fourth quarter of last year.

The company's stock price tumbled yesterday on the lackluster first-quarter results. At the end of trading, MediaTek closed at NT$240.5, down 6.42 percent, near its 7-percent limit.

Institutional investors had held mixed views over MediaTek's first-quarter performance. Those representing the more optimistic view had predicted an increase in both sales and market share, on a possible reduction in shipments from Qualcomm, a major competitor, due to capacity shortage at chip foundries.

The pessimists, meanwhile, had predicted the firm would see gross profit margin drop due to a reduction in price. It seems the pessimistic view has prevailed in the end.

The company meanwhile has expressed optimism for a sales increase in the April-June period, on rising demand for new chips and end-user products. Analysts echoed that optimism, saying second-quarter sales would experience double-digit growth over the first quarter due to the introduction of new handset models and increasing business during China's weeklong May 1 national holiday.

According to institutional investors, the firm had already shipped out 5 million sets of smartphone chips, and the figure is expected to reach 6 million to 7 million in April.

For the year, MediaTek may ship out 72 million smartphone chips, thanks to increasing demand from major clients, analysts said. The figure will exceed the firm's own estimate by 40 to 50 percent.

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