TAIPEI -- Metal casing supplier Catcher Technology on Thursday reported a weak first quarter with both revenue and net profit falling thanks to a slump in global demand for Apple's iPhones, and warned of dim outlook for the April-June period.
Catcher Chairman and Chief Executive Allen Horng said his company is likely post a year-over-year decline in revenue for the first half of 2016 in a market that is "still filled with uncertainties," while it may pick up pace later this year.
"We could start to see some growth in the third quarter," said Horng. "The revenue for second half of 2016 would be flat or slightly better compared with the year-ago period."
For the January-March period, Catcher generated revenue of 16.84 billion New Taiwan dollars ($520 million), down 3.2% from a year ago on a net profit of NT$4.15 billion, slumping 10.6% on the year.
The company attributed the double digit decline in net profit to equipment depreciation and price cuts by major customers due to their unclear sales outlook. Apple accounts for 20% of Catcher's revenue, according to the company's 2014 annual report.
Shares of Catcher slipped 5.61% to NT$202 ahead of the earnings report. They have fallen 26.27% so far this year.
Catcher' woes are in fact running deeper than the current Apple iPhone wobble. Analysts say that the U.S. tech titan's mooted shift from metal to glass casings starting in the second half of 2017 will devastate Catcher while benefiting Chinese glass casing makers such as Biel Crystal Manufactory and Lens Technology.
"Apple's potential move will deal a serious blow to metal casing suppliers," said Jeff Pu, an analyst at Yuanta Investment Consulting. "Although a glass casing will still require a metal frame, [the] price for metal material could drop 25% to 30%."
"Taiwan's casing suppliers could be squashed by Chinese rivals once the U.S. giant decides to proceed with the switch," Pu added.
Biel Crystal Manufactory and Lens Technology are already providing glass covers for Apple's various products and can easily eat into Catcher's market share after the shift, according to Pu.
Horng on Thursday tried to allay concerns by saying Catcher has yet received any information from Apple about what material the U.S. company will pick for casings next year.
"It is impossible at the moment for smartphones to adopt a 100% whole-glass casing due to durability issues," said Horng. "A glass casing still needs a metal frame for support, and it will still require metal processing technologies."