AU Optronics Corp (AUO, 友達光電) yesterday posted its first quarterly operating profit after nine straight quarters in the red, as its new ultra-high-resolution TV panels helped boost prices.
That paved the way for the nation’s No. 2 LCD panel maker to swing back to profit in the first quarter, with the growth momentum expected to extend into this quarter, the company said.
AU Optronics forecast that shipments and prices of flat panels used in TVs and PCs would grow by 5 to 8 percent this quarter from last quarter’s 27 million units, mostly benefiting from sustained demand for energy-saving TVs in China.
Strong demand for its tablet panels is also expected to drive shipments of panels used in mobile devices to grow by a double-digit percentage sequentially this quarter, from about 31 million units after tablet panel shipments doubled last quarter, AU Optronics said.
AU Optronics is one of the suppliers of Apple Inc’s iPad series.
Prices for panels used in TVs, PCs and mobile devices could increase by 3 to 5 percent quarter-on-quarter, the company said.
“AUO delivered a very bullish forecast for the second quarter. That strengthened our confidence that AUO would return to the black in the second quarter,” Fubon Securities (富邦證券) analyst Calvin Shao (邵琮淳) said by telephone, adding that all key indicators — shipments, prices and margins — were all on the rise.
Shao retained his “buy” rating on AU Optronics and raised his price target above NT$15, implying an upside of more than 10.7 percent from the stock’s closing price of NT$13.55 yesterday.
In the first quarter, the company posted an operating profit of NT$184 million (US$6.21 million), its first since the fourth quarter of 2010.
Operating margin improved to 0.2 percent last quarter from minus-3.4 percent in the previous quarter and minus-15.3 percent in the first quarter last year.
“Margin is likely to improve further in the next few quarters,” company chief financial officer Andy Yang (楊本豫) told investors.
Net loss shrank significantly to NT$3.32 billion last quarter from a loss of NT$12.95 billion in the previous quarter and NT$13.78 billion a year earlier, the company’s financial statement showed.
Prices for TV panels, which accounted for almost half of AU Optronics’ revenues, climbed 2. 35 percent sequentially to US$610 per unit last quarter, from US$596 in the fourth quarter last year.
Prices for ultra-high-resolution TV panels are 1.7 times higher than that of regular LCD TV panels, AU Optronics said.
Shipments of new TV panels — introduced last year with 55-inch and 65-inch models dominating — are expected to be double that of last year, the company said.
“We are seeing growth momentum in the first quarter carry on into the current quarter, which will be better than the first quarter. We do not see any key unfavorable factors that could impact the industry, while demand has kept on rising,” AU Optronics president Paul Peng (彭雙浪) told reporters.
“China and the emerging markets are growth areas [in terms of TV demand] ... TV sales in China in the first half of this year will exceed market expectations,” Peng said. “Demand in the North American market looks flat, but [people are] shifting to larger TVs.”
Equipment loading rate for this quarter is forecast to rise from last quarter’s more than 90 percent, he added.