Why did Casetek Just Report Its Worst Quarterly Earnings Ever?

10 Nov

Casetek Holdings, a metal casing supplier for MacBooks and iPads, reported its lowest quarterly earnings period to date Tuesday as the company’s bottom line was slammed by the delayed launch of the new MacBook Pro. Casetek’s net profit fell 77.4% year-on-year and 15.8% on a quarterly basis to NT$366 million (US$11.62 million) in the third quarter.

“The weaker-than-expected profitability and gross margin are mainly due to postponed shipments of new notebook computers,” Casetek chief financial officer Jonathan Chang said during a teleconference.

Casetek chief executive officer Gary Chuang said revenues should rise this quarter. That trend would continue through the first quarter of 2017, buoyed by shipments of the new 13-inch and 15-inch MacBook Pros. Last year, Casetek won the orders for the 12-inch MacBook, while this year the company entered the supply chain for the 13-inch and 15-inch MacBook Pros for the first time. “We foresee the revenue contribution from notebooks rising significantly next year,” he said.

Notebooks comprise 40% of Casetek’s overall revenue, while tablets make up 50 to 60%.

Analysts say Casetek has long sought to enter the iPhone supply chain but has never succeeded. During the teleconference, Chuang said: “I believe we will have a good chance next year [to enter the iPhone supply chain], given the client’s positive feedback.”

Some market insiders believe Casetek’s position in the Apple supply chain could be threatened if Apple decides to use glass back covers on its next-generation iPhones to be released in 2017. Chuang, however, said he would “not be worried” if Apple were to make that decision, noting that “both materials would require casing suppliers’ computer numerical control (CNC) machines and technologies.”