Benq says profits rose on cell-phone, flat-panel sales

Benq Corp (明電), Taiwan's largest maker of cellular phones, said first-quarter profit rose more than sixfold because of stronger demand for its handsets and flat-panel displays.

Net income rose to NT$2.16 billion (US$62 million) from NT$350 million a year ago. First-quarter sales almost doubled to NT$23.4 billion from NT$11.9 billion.

The company said net income this year will rise to about NT$8 billion, or 165 percent, from a year ago and sales will increase 64 percent.

Benq makes mobile phones for Motorola Inc, the world's second-largest handset maker, and other companies. The company said that demand for cellular phones will be strong during the second quarter.

Benq's profit surged after Motorola Inc and other smaller customers farmed out more production to cut costs, Chief Executive Officer Lee Kun-yao (李焜耀) said in an interview.

Analysts said they share Lee's optimism of record profits because of increased income from unit AU Optronics Corp (友達光電), which supplies flat panels to Benq.

"I'm forecasting Benq will report NT$2 billion in net income," said Teresa Chen, an analyst with Deutsche Bank Securities.

"The company's handset sales will probably rise to 10 million units this year from 6 million a year ago."

Benq competes with Solectron Corp and Flextronics Corp, which make electronic products like mobile phones for other companies.