Wed, Aug 16, 2006 - Page 12 News List

Prime View posts quarterly profits


Prime View International Co (元太科技), a leading Taiwanese maker of liquid-crystal-display (LCD) panels for portable DVD players and handsets, yesterday posted gains for the second straight quarter, relying on products with large profit margins to offset drastic price declines.

After a sharp price correction last quarter, Prime View expected prices to stabilize this quarter on seasonal demand, which would help the company sustain its gross margin.

Prime View eked out net profits of NT$34.26 million (US$1.05 million), or NT$0.06 per share, during the three month period ending in June, compared to a quarterly loss of NT$49.53 million -- NT$0.12 a share -- a year ago.

"Sharp price decline ate into our profits in the second quarter. We believe the price decline for benchmark 7-inch LCD panels will be limited in the near term," chairman Scott Liu (劉思誠) told a press briefing.

The second-quarter results represent a 70-percent decline from net profits of NT$120.27 million in the first quarter, after panel prices plunged 25-30 percent over the past seven months.

Liu said fierce competition and a supply glut caused prices for 7-inch LCD panels, mostly used in automobiles, to drop to a level below the cost of most makers.

As the decline was expected to slow down, Liu expected Prime View to sustain its gross margin in the current quarter. But, demand in the third quarter would not be as strong as it used to be, Liu said, implying that revenue growth would not be as significant as before.

Sales of panels used in portable DVD players made up a 40 percent share of the company's total revenues of NT$2.57 billion last quarter, down from 50 percent in the first quarter.

Gross margins improved to 5.3 percent during the April-June period, from 3 percent during the same period last year, as Prime View sold more increased-margin handset panels, the company said.

Sales of handset panels rose to make up more than 10 percent of the company's total revenues last quarter, after Prime View diversified into the segment in late 2005.

Prime View supplies panels to some regional mobile phone brands and panel makers without the ability of making LCD screens.

The company is counting on its niche electronic-paper display products to lift its profitability in the future. Prime View now supplies electronic-paper displays to Sony Corp and another unspecified company.

Shares of Prime View rose 0.82 percent to NT$12.25 on the nation's over-the-counter Gretai Securities Market yesterday.

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