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Chi Mei posts first quarter net loss

Chi Mei Optoelectronics Corp (奇美電子), the nation's second-largest maker of liquid-crystal displays, posted a net loss yesterday of NT$1.104 billion (US$33 million), or NT$0.19 a share, in the first quarter on falling panel prices.

The result compared with a profit of NT$436 million, or NT$0.05 a share, posted in the fourth quarter of last year and a profit of NT$5.46 billion, or NT$0.99 a share, from the same period a year ago, Chi Mei said in a statement.

Chi Mei joins bigger rivals LG.Philips LCD Co and AU Optronics Corp (友達光電) in reporting a loss after an oversupply of LCD panels dragged down prices. Still, LG.Philips and AU Optronics have predicted a recovery in the second half of the year as demand catches up to supply.

"Expectations for Chi Mei were lowered," said Jordan Chen, who oversees US$1.3 billion in assets at Invesco Taiwan Ltd (景順投信). "Their margins are so low, they're almost selling panels at cost."

Gross margin narrowed to 8.5 percent from 21 percent a year earlier. Operating profit fell to NT$605 million in the first quarter from NT$1.293 billion in the previous quarter and NT$7.24 billion a year ago, the statement showed.

Sales, reported earlier this month, were down 14.7 percent to NT$47.095 billion from the previous quarter and 0.34 percent year-on-year, it said.

The company said it shipped 9 million panels in the three months to March, which represented a 9 percent decrease over the 9.9 million panels shipped in the fourth quarter last year.

This quarter, the company said it expects shipments for panels used in TVs to rise more than 25 percent from the first quarter, while PC panel shipments should rise 10 percent to 15 percent over the same period.

The average selling prices will be similar to the first quarter's US$159 average, Chi Mei president Ho Jau-yang (何昭陽) told investors and reporters yesterday.
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