MANHASSET, N.Y. Taiwan passives supplier Yageo Corp. reported third-quarter earnings of $4.8 million on sales of $127.8 million, compared to $4.7 million on sales of $134.7 million in the previous quarter and $6.7 million on sales of $123.9 million in the year-ago quarter.
The company cited declining demand and renewed price erosion during the third quarter, and expects price erosion to intensify despite a seasonal recovery by EMS and computer customers.
Yageo's situation is similar to U.S. passive suppliers, such as Kemet Corp., who have seen declining prices and sales after a period of relative prosperity.
Yageo's third-quarter gross margin was 28.8 percent, compared with 30.1 percent the previous quarter and 27.1 percent a year ago. Yageo said it would emphasize sales of higher margin R-chip and special multi-layer ceramic chip capacitors to offset price erosion and lower capacity utilization.
For the first nine months of 2004, Yageo reported sales of $387.8 million, up 10 percent from a year ago.