Apple supplier AAC Tech sees shares plunge after profit warning


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FILE PHOTO: The company logo of AAC Technologies Holdings Inc is displayed at a news conference in Hong Kong, China, Aug. 22, 2018. REUTERS/Bobby Yip/File Photo

HONG KONG (Reuters) – Shares of Apple Inc supplier AAC Technologies Holdings Inc dropped 13 percent on Tuesday after the acoustic component maker said it expected first-quarter net profit to fall as much as 75 percent due to reduced orders.

The Hong Kong-listed firm late on Monday forecast January-March profit to fall 65-75 percent compared with the same period a year earlier, and said its gross profit margin would narrow.

“In addition to a usual weak seasonal quarter, the company’s revenue for Q1 2019 is expected to be significantly negatively affected by reduced orders from customers,” AAC said in a stock exchange filing.

It is scheduled to announce first-quarter earnings at the end of May.

AAC said profitability would increase due to improvement in its product portfolio, production efficiency and cost control. It also expects customers to upgrade their smartphone offerings.

The announcement comes as rival Luxshare Precision Industry Co Ltd late on Monday said 2018 net profit likely rose a 61 percent.

The price of AAC shares fell as much as 13 percent to HK$50.85, compared with a 0.69 percent fall for the benchmark Hang Seng Index. The stock was the fourth most actively traded in early trade.

As of the previous close, the stock had risen 29 percent so far this year.

Reporting by Anne Marie Roantree, Donny Kwok and Sijia Jiang; Editing by Stephen Coates and Christopher Cushing

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