Chimei Innolux Corp (奇美電子), the nation’s top LCD panel maker, yesterday posted its seventh consecutive quarterly loss as panel prices and shipments continued to drop amid sluggish demand for flat-panel TVs and PCs.
However, losses narrowed to NT$12.77 billion (US$436.9 million) in the first quarter, compared with losses of NT$13.80 billion a year earlier and NT$20.31 billion in the previous quarter, the Miaoli-based company’s financial report showed.
The results were worse than the NT$11.88 billion loss predicted by Credit Suisse, but better than the average loss of NT$14.95 billion forecast by most analysts.
Chimei Innolux, the world’s third-largest LCD panelmaker after Samsung Electronics Co and LG Display Co, said loss per share was NT$1.75 in the first three months. That compares with a loss per share of NT$2.73 in the previous three months and NT$1.80 the same period last year, the report showed.
“The outlook in the second quarter will be better than the first quarter,” Chimei chairman Tuan Hsing-chien (段行建) told an online conference yesterday.
Average selling prices (ASPs) will rise slightly this quarter from the first quarter, Tuan said, after the company saw ASPs for TV and PC panels decline 3.37 percent to US$86 per unit last quarter from US$89 per unit a quarter ago and NT$101 per unit one year ago.
Chimei forecast panel shipments would increase by 10 to 20 percent quarter-on-quarter, and the factory utilization rate would move above 90 percent this quarter, as customers rebuild inventory and new product launches stimulate demand.
“Shipments of large-sized panels in the second quarter are -expected to rise by 10 to 20 percent from the first quarter, and those of small to medium-sized panels should also increase by the same range,” Tuan said.
“Utilization rate is likely to reach above 90 percent this quarter, up from 80 percent to 85 percent in the first quarter,” he added.
The company will gradually shift its focus to 39-inch and 50-inch TV panels amid its continued efforts to adjust product mix and will develop higher-margin products such as touch sensors and OLED screens in a bid to improve profitability, Tuan said, adding that the company already terminated its lower-margin system assembly business at the end of March.
The company also hopes to improve its margins this quarter, chief financial officer Eddie Chen (陳彥松) said at the conference, after Chimei reported a gross margin of minus-6.2 percent and operating margin of minus-11.1 percent in the first quarter.
In the prior quarter, the company’s gross margin and operating margin were minus-8.2 percent and minus-13.2 percent respectively.
Chen said Chimei would strive to manage its capital expenditure this year under NT$30 billion, compared with NT$50 billion for last year.
Commenting on the alliance between Hon Hai Precision Industry Co (鴻海精密) and Sharp Corp announced in late March, Tuan said it certainly would “increase the chances of Chimei’s cooperation with the Japanese company,” but he declined to elaborate. Chimei is a subsidiary of Hon Hai, the world’s largest maker of electronics parts.
In the first quarter, Chimei reported a consolidated revenue of NT$109.24 billion, down 16.23 percent from NT$130.41 billion in the fourth quarter of last year and 12.14 percent from NT$124.33 billion a year earlier.