Chi Mei Optoelectronics Corp (
However, profits were expected to slide in the current quarter due to price erosion on seasonal factors, president Ho Jau-yang (
The price for TV panels would drop 5 percent at quarterly rate, while that for computer panels would fall by a faster 10 percent at least, Ho forecast.
Overall, panel sales would rise by a single-digit percentage point in the three months through June from 6.95 million units in this year's first three months, he said.
Ho expected the April-June quarter would be the bottom.
"We expect the industry to gradually recover in the third quarter," he said.
During the quarter ended March 31, Chi Mei earned NT$5.46 billion (US$170.7 million), or NT$1.04 per share, compared to losses of NT$1.97 billion in the first quarter of last year, according to a company statement.
Panel prices rose to US$211 per unit on average from US$181, during the same period, the company said. TV panels accounted for more than half of the company's total sales in the first quarter, up from 38 percent a year ago.
The quarterly results represent a drop of about 35 percent quarter-on-quarter. Sales jumped 77 percent year-on-year to NT$47.26 billion, the company said earlier this month.
"The results are quite good, well above my forecast of NT$3.4 billion in earnings," said Frank Su (蘇穀祥), an analyst with BNP Paribas Securities Ltd's local branch.
The company's EBITDA margin unexpectedly improved to 31 percent, Su said, beating bigger competitors AU Optronics Corp (
EBITDA, which is earnings before interest, taxes, depreciation and amortization, is a tool investors use to measure a company's operating cash flow, especially in the capital-intensive LCD industry.
"For the second quarter, it would be acceptable to see a quarterly decline between 40 percent and 50 percent [in earnings for Chi Mei]," Su said.
The analyst added that Chi Mei had given a conservative outlook for the current quarter.
Ho said Chi Mei would aggressively expand production in its eighth-generation factory in Kaohsiung County.
Chi Mei's profit announcement came after AU Optronics said it would acquire local panel maker Quanta Display Inc (
"TV sets with screens bigger than 40 inches will soon become the norm," Ho said.
Chi Mei planned to double the monthly capacity of its first eight-generation plant, which would make 50-inch or bigger TV panels, to 1 million glass substrates by the end of next year, he said.
That could result in capital expenditure for next year exceeding the figure of NT$100 billion budgeted for this year, said Eddie Chen (陳彥松), a Chi Mei financial executive.
Chi Mei has reserved 60 hectares of land in Kaohsiung on which it plans to build three more eighth-generation plants in the future.
Shares of Chi Mei fell 3.44 percent by to NT$45.2 on the Taiwan Stock Exchange. The company released its quarterly results after the market closed.
RSS