AU Optronics notches up record for monthly sales

AU Optronics Corp (友達光電) led shares of liquid-crystal-display (LCD) makers higher after reporting record monthly sales, fueling optimism that rising panel prices will boost industry earnings.

The world's third-largest maker of LCDs surged by its daily limit of 6.9 percent and closed at NT$60.40 (US$1.85), the highest in more than three years. LG.Philips LCD Co, which reports earnings today, jumped 7.1 percent to close at 45,950 won (US$50.24) in Seoul.

Chi Mei Optoelectronics Corp (奇美電子) and Chunghwa Picture Tubes Ltd (中華映管) also gained in Taipei.

AU Optronics' record sales came as LCD makers, which are taking market share from rival plasma and glass-tube display makers, prepare to disclose profits for the latest quarter. Prices of 17-inch LCD panels have jumped 35 percent since their low this year in March amid a shortage, according to data compiled by Taipei-based WitsView Technology Corp (聯景科技).

"The revenue number came in much better than I expected," said Robyn Hsu (許家豪), who holds AU Optronics shares as part of the US$152 million he helps manage at Truswell Securities Investment Trust Co (富鼎投信).

"That suggests the panel prices are rising, and that is definitely good news for profitability," he said.

Hsu said that he would consider buying additional AU Optronics shares.

AU Optronics revenue for last month almost doubled to NT$53.7 billion (US$1.65 billion), the Hsinchu-based company said after markets had closed on Friday.

The Chinese-language Commercial Times newspaper reported on Sept. 12 that AU Optronics would post a profit of as much as NT$22 billion for the third quarter and more than NT$20 billion for the fourth quarter.

AU Optronics reported a NT$5.99 billion profit for the three months ended June.

LG.Philips, second only to Samsung Electronics Co in LCD production, will probably report net income of 519 billion won (US$567 million) in the three months ended Sept. 30, according to the median estimate of 10 analysts surveyed by Bloomberg.

That would be the highest profit since the second quarter of 2004. LG's profit will probably rise next year in tandem with a shortage of panels, according to Credit Suisse Group.

Sales of LCD televisions would probably surge 86 percent to 78 million units this year, while plasma televisions will increase 22 percent to 13 million units, according to estimates by James Kim, an analyst at Lehman Brothers Holdings Inc.

Sales of bulkier glass-tube TVs would fall 18 percent, Kim said.