Print

Mail

wiki links

Panel firms' earnings likely to dive

Taiwan's liquid-crystal-display (LCD) panel makers, led by AU Optronics Corp (友達光電), are expected to report a dramatic 70-percent decline in quarterly earnings as panel prices nosedive due to overcapacity, analysts said yesterday.

"Panel prices are sliding at a faster-than-expected pace, compared to the last trough in 2002," said Ken Yu (余文耀), an analyst with SinoPac Securities Corp (建華證券).

In the past three months, the price of 17-inch LCD screens has plunged over 35 percent to US$190 per unit as more players enter the segment, including Taiwan's HannStar Display Corp (瀚宇彩晶), Yu said.

AU Optronics, the world's No.3 supplier of LCD screens for computers and televisions, may post lower third-quarter earnings of NT$4.1 billion, from NT$14.39 billion in the second quarter, Yu projected.

AU is scheduled to release its third quarter results on Oct. 27.

Smaller competitor Chi Mei Optoelectronics Corp (奇美電子) may feel a similar pinch, with profits squeezed some 70 percent from the previous quarter, to around NT$3 billion for the quarter ending last month, Yu said.

"That will not be the biggest earnings decline for Taiwan makers," Yu said, adding that smaller local panel makers may suffer more because of weaker cost control.

On the local bourse, AU Optronics' shares dropped 3.54 percent to NT$43.60 yesterday on lingering fears of a further price tumble. Chi Mei shed 2.98 percent to NT$42.30.

In South Korea, bigger rival LG Philips LCD Co, the world's No. 2 LCD panel maker, yesterday reported that third-quarter net income fell 15 percent from a year ago and 59 percent from the previous quarter to 291 billion won (US$253 million). It marked the Seoul-based company's first profit decline in five quarters.

But LG Philips' performance was better than expected due to its stronger cost control, said Kevin Chiang (蔣珮瑋), an analyst with Grand Cathay Securities Co (大華證券).

"Overall, South Korean flat panel makers are able to shrink costs by an additional US$10 per unit over Taiwanese companies. That has given them a better position to win orders, while remaining profitable," Chiang said.

LG Philips' operating profit fell 35 percent to 244 billion won and sales rose 10 percent to 1.8 trillion won. The average selling price of LG Philips's flat-panel displays during the third quarter fell a fifth from the previous quarter and declined almost 10 percent from a year earlier to US$2,857 per square meter, the company said.
This story has been viewed 2325 times.