AU Optronics Corp (友達光電), Taiwan's No. 1 flat-panel maker, and its local rivals reported a strong fourth quarter on rising panel prices and the growth momentum is expected to continue this year, industry watchers said yesterday.
AU's fourth-quarter earnings rose to NT$7.6 billion after subtracting the audited first three-quarter numbers from the totaks for last year. AU posted a net loss of nearly NT$800 million during the fourth quarter of 2002.
"AU's fourth-quarter financial result exceeds our expectations of about NT$7 billion," said Tim Chen (
The flat panel maker said its net income jumped to NT$15.66 billion last year, or NT$3.65 a share, which represents a 160-percent growth from the previous year.
Investors reacted positively to AU's stronger financial results by pushing up AU shares 1.48 percent, which closed at NT$47.90 each on the TAIEX yesterday.
Chen said the stronger-than-expected earnings resulted from a consistent rise in the average price of flat panels during the last quarter and better cost savings, helped by the operation of its advanced fifth-generation plant.
Echoing that view, Alex Wu (吳興國), an analyst with KGI Securities (中信證券), said AU beat his expectations in the wake of strong demand for 17-inch panels for desktop monitors and 20-inch panels for flat-screen televisions, as well as strict cost control.
Looking ahead, Chen expected AU and its local flat panel suppliers to enjoy continuous profit growth this year, as the increase in production volume will offset the pressure of a gross margin decline.
Wu also said "the 2003 growth momentum should be able to carry into this year as panel prices should hold stable."
That is because the increase in panel output will not tip the balance between supply and demand, as the ongoing shortage in key components -- such as color filters and glass -- will continue to curb flat panel shipments after more local companies start to mass produce panels in fifth-generation plants later this year, Wu said.
AU's local competitors will also benefit from the upward price trend and strong demand.
Chi Mei Optoelectronics Corp (
"A spike in the shipment of large-sized panels used for LCD sets should be the key driving force," Wu said.
Wu expected Chi Mei to more than double its shipments of 30-inch-or-bigger panels in the fourth quarter, to 250,000 units from 100,000 units in the third quarter.
Chunghwa Picture Tubes Ltd (中華映管), Taiwan's No.3 flat panel maker, returned to profitability after reporting consolidated earnings of NT$2.86 billion in the last quarter, said James Wu (巫俊毅), an official at Chunghwa Picture.
For the full year of 2003, Chunghwa Picture said it earned NT$978 million, or NT$0.19 per share. The company forecasted that earnings would jump to NT$8.5 billion this year.
HannStar Display Corp (
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