Epistar facing Deficit in 3Q. Deficit NT $834.22 million, EPS NT $ -0.09.
Taiwanese LED chip manufacturer Epistar has released their 3Q13 financial results. Feeling the effects of LED for TV backlight applications inventory adjustments in 3Q, consolidated revenue for the quarter reached NT $5.75 billion (US $195 million), a dip from 2Q of 5.17 percent. However, consolidated gross profit reached 16.09 percent, growth of 15.89 percent from 2Q. Although, with more funds being pumped into R&D, operating profit margin only reached 3.55 percent, a decrease of 6.38 percent from 2Q. An addition of recognized earnings of over NT $300 million for loss on valuation of financial liability lead to a deficit of NT $834.22 million in 3Q, single quarter EPS NT $ -0.09 and accumulative EPS for three previous quarters of NT $0.02.
Epistar 3Q profit turned to loss came in the limelight. The company was able to maintain earnings in 3Q, and stock prices increased 10 percent due to impact from issuance of the company’s 4th convertible bonds in August. Despite of these developments, financial regulations required that over NT $300 million is to be recognized as loss on valuation of financial liability leading to non-operating loss increase to NT $281 million. Therefore, 3Q had a deficit of NT $834.22 million, single quarter EPS of NT $ -0.09 and EPS for three previous quarters of NT $0.02
Epistar 3Q consolidated revenue reached NT $5.754 billion, a quarterly decrease of 5.17 percent, but still had a yearly growth of 1.43 percent. The company had a gross profit of NT $926 million, a quarterly dip of 3.98 percent and annual increase of 22.32 percent. Gross profit margin reached 16.09 percent, a growth of 15.89 percent compared to 2Q and 13.34 percent from last year’s 3Q. However, in accordance with next year’s new product launch, the company has invested more in R&D in 3Q spurring 3Q consolidated revenue to reach 3.55 percent, a large drop from 1Q of 6.38 percent but still higher than last year’s 3Q of 2.82 percent. Operating income reached NT $204 million, a quarterly decrease of 47.18 percent and annual increase of 27.68 percent.
About Epistar Corp.
Epistar Corp. is the largest manufacturer of light-emitting diodes (LEDs) in Taiwan. The company was established in 1996, and its headquarters are in the Northern Taiwanese city of Hsinchu. In 2009 it had an annual turnover of NT$10 billion. Epistar specialises in high-brightness LED products, which are used in general lighting, traffic signals, and various consumer products such as mobile phones and laptop computers. The company supplies the LED backlighting for Samsung liquid crystal displays. It is the world’s largest manufacturer of red and yellow LEDs, and holds over 1000 patents. It has a history of patent disputes with competitor Philips Lumileds over the use of AlInGaP LED technology. However in September, 2009, Philips Lumileds signed an agreement to license AlInGaP technology to Epistar.