HannStar posts earnings at last

HannStar Display Corp (瀚宇彩晶), one of the nation's leading flat-panel makers, yesterday posted its first quarterly earnings in 10 quarters -- primarily as a result of asset gains and improving screen prices.

During the quarter ended on Dec. 31, HannStar eked out earnings of NT$998 million (US$30.17 million), or NT$0.17 per share, reversing losses of NT$1.29 billion a year ago and NT$3.04 billion in the third quarter, a company statement said.

HannStar's earnings were boosted by a NT$6 billion gain in non-operating income, half of which came from handset panel maker Wintek Corp's (勝華科技) final payment for the purchase of a manufacturing plant.

To reduce losses per share, HannStar's board yesterday approved a 17.2 percent capital reduction plan. The panel maker plans to reduce its capital from NT$60.5 billion to NT$50.1 billion by cutting the number of outstanding shares to 5.01 billion.

losses

HannStar's operating losses contracted to NT$558 million last quarter, compared with NT$2.69 billion in losses in the third quarter. However, a year earlier, the company posted an operating income of NT$491 million.

"The average selling price [ASP] will have to rise if we are to make profits. The most important thing for us to focus on is cutting costs," HannStar president Joe Chou (周定輝) said.

Chou said HannStar would save another 5 percent in costs this quarter from last quarter.

Chou said he expected screen prices to decline by a single-digit percentage -- or US$3 to US$5 per month -- in the first three months of the year as a result of a supply glut. Fueled by PC demand, shipments would increase slightly from 4.25 million units, he added.

The ASP rebounded by 6.2 percent to US$137 last quarter from US$129 in the July to September period, but declined 16 percent from US$163 on an annual basis.

recovery

Citing lower inventory compared with the downturn in 2005, Chou said the liquid-crystal-display panel market would recover sharply in the third quarter.

HannStar would concentrate on profits and be cautious on building new plants, Chou said. HannStar operates three plants at present.

For this year, HannStar plans to spend NT$900 million in new facilities and equipment, down sharply from the NT$7.7 billion in capital spending last year, he said.

Since the beginning of the year, HannStar shares have dropped 5.03 percent to NT$5.85 yesterday, under-performing the benchmark TAIEX index's 2.32 percent loss.