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Nam Tai Electronics Q2 Profit Surges On Top-Line Growth; Stock Up - Update

(RTTNews) - Nam Tai Electronics, Inc. (NTE), a provider of electronics manufacturing and design services, reported Monday a surge in profit for the second quarter, reflecting strong growth in consumer electronics and liquid crystal display segments. NTE stock is currently up by more than 6% on the New York Stock Exchange.

For the second quarter, net income attributable to Nam Tai shareholders soared to $3.21 million or $0.07 per share from $0.61 million or $0.01 per share in the year-ago period.

Excluding employee severance benefits and share-based compensation expenses from respective periods, income for the quarter was $3.7 million or $0.08 per share versus $1.6 million or $0.03 per share last year.

Operating income was 3.3% of sales for the quarter versus 1.4% a year ago.

Other income for the quarter was $0.78 million versus expenses of $0.10 million last year.

Sales for the quarter grew 11.9% to $113.91 million from $101.83 million in the year-ago period.

Consumer Electronic and Communication Products sales grew 16.7% for the quarter to $31.04 million from $26.60 million last year. Telecommunication Component Assembly sales were higher 6.7% for the quarter at $62.20 million versus $58.27 million a year ago. Liquid Crystal Display Products' sales grew 22% to $20.67 million from $16.95 million in the year-ago period.

Consumer Electronic and Communication Products made up 27% of net sales for the period, Telecommunication Component Assembly formed 55% of sales, and Liquid Crystal Display Products were 18% of sales. All the three segments were more or less at year-ago levels.

Going forward, the Shenzhen, China-based company anticipates higher demand in the second half of the year for LCD modules and telecommunication subassemblies. However, Optical and educational products, a part of consumer electronics segment, having dropped from previous years, are expected to stay weak for the year.

The company added that given the current economic climate and fluctuation of received orders even in normal times, the results for the first half cannot be taken as indicative of future trends.

The newly operating FPC manufacturing plant in Wuxi is expected to generate sales beginning the third quarter, after the current slow period. The company said the plant was being augmented with technology, and expected the facility to breakeven in the third quarter of fiscal 2011.

The integration of consumer electronics segment with the already integrated telecommunications component and liquids crystal segments is expected to be completed in the current third quarter. The company said integration of management of TCA and LCDP segments fostered a return to growth of the segments and also synergies at the LCD modules segment.

The operational improvements are expected to be mitigated by the appreciation of the Renminbi and inflationary pressures in China which could drive compensation levels upwards.

NTE is currently trading on the NYSE at $4.66, up $0.31 or 7.13%, on a volume of 247.9 thousand shares. Over the past year, the stock has traded in a range of $4.05 - $6.25, with average volume over three months of 74.7 thousand shares.