MACAO – EMS provider Nam Tai Electronics reported third-quarter sales fell 21.5% to $160 million, while gross profits and net earnings both dropped more than 60% year-over-year.

Net income was down 61.3% to $4.9 million, while gross profits were off 69.3% to $15.7 million for the period ended Sept 30.

Nam Tai is the world’s 20^th largest EMS company. However, its ranking could slip if it doesn’t right its year-to-date drop in sales of 23.6%.

The company cited a continuing decline in telecommunication component assembly revenue, which is accelerating due to declining demand and pricing pressure for mobile phones. TCA sales were off 20% compared to the same quarter of 2007, while LCD sales dropped 6% and consumer electronics and communications fell 27%.

For the quarter, gross profit margin was 9.8% as compared to 12.7% in the third quarter of 2007. Operating income was $4.4 million, down from $13.9 million. At quarter’s end, the company had $250.5 million in cash and cash equivalents on hand.

Nam Tai said the adverse economic conditions would result in “negative effects to our results of operations over the next several quarters.” The appreciating renminbi against the US dollar is also hampering profits.

Construction of Nam Tai's factory in Wuxi, China – the first of three planned expansion projects – continues on schedule with completion still targeted for the first half of 2009. However, in view of economic climate, the company may postpone construction of a factory in Shenzhen and a second site in Wuxi.