AU Optronics Corp (AUO, 友達光電), the nation’s second-largest LCD panel maker, yesterday posted its ninth consecutive quarter of profit as the company continued to streamline its operations to weather a downturn in demand.
Net income declined from the first quarter by 16 percent to NT$4.43 billion (US$140.3 million), or earnings per share of NT$0.47, as revenue fell 3.1 percent quarter-on-quarter to NT$92.3 billion due to falling panel prices and clients’ inventory adjustments.
“While sales during the slow season last quarter were not as dismal as anticipated, we do not expect the peak season this quarter to be as stellar as usual,” AUO chief executive officer Paul Peng (彭双浪) told investors during a teleconference.
Peng said that the PC display market still faces tremendous difficulties this quarter, due to tepid demand and rising uncertainties amid a continuing global economic downturn.
In the second quarter, company shipments of large-sized display panels for computers and TVs fell by 7.1 percent to 24.9 million units, while those of small and medium-sized panels for smartphones and other mobile devices rose 12.6 percent to 48.04 million units, AUO said.
Peng said small and medium-sized panels this quarter face rising inventory adjustment at the retail end, which might lead to a slump in new orders.
Over the past three years, AUO has shifted away from major production capacity expansion, focusing on differentiating its offerings by tackling the high-end market.
As the company has limited capital expenditure to about NT$40 billion this year and next year, and contained its depreciation costs at less than NT$50 billion a year, along with falling debt, Peng said AUO’s operations and fiscal condition would continue to improve.
In bracing for a difficult third quarter, Peng said that the equipment loading rate would be dynamically adjusted to suit demand.
The figure stood at 95 percent in the second quarter, he said.
“Compared with Chinese rivals, who have never weathered a major downturn, AUO is well-prepared for the coming challenge,” Peng said.
Peng said the company’s True RGB 4K TV panels are expected to rival high-end alternatives such as OLED.
He is also anticipating upsides in the display markets for large, curved 4K TVs, wearable devices, commercial displays and automobile displays.
In the first half, AUO reported a net income of NT$9.7 billion, or NT$1 per share, on sales of NT$187.6 billion.
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