AU Optronics Corp (AUO, 友達光電), the world’s third-largest flat-panel maker, yesterday posted its first quarterly earnings in a year, helped by higher prices, but it expected a weaker fourth quarter.
AUO reported a net profit of NT$7.42 billion (US$229 million) for the July-September period, ending three consecutive quarters of losses that began in the final quarter of last year. It returned to profit one quarter behind its South Korean rival, LG Display Co.
A rapid recovery in demand for TVs, primarily in China, boosted prices, helping AUO.
A year ago, the company reported NT$860 million in net profit as the economic slump began taking its toll on consumer demand.
The latest quarterly results indicated that the company’s business was well on track to recovery, but it said a dip was possible this quarter, when consumers are traditionally more reluctant to spend, AUO said.
“The recent weakness in PC demand is a seasonal effect, not [an indicator] of a big [liquid-crystal-display, LCD] downcycle. We are entering a seasonal cycle and do not expect any adverse economic factors in the remaining year [to hurt demand],” said Paul Peng (彭雙浪), an executive vice president of AUO.
Equipment usage could slide to around 90 percent from nearly full usage in the third quarter, the LCD maker said.
Shipments of computer panels are expected to drop by around 5 percent quarter-on-quarter, while TV panel shipments may grow between 5 percent and 10 percent, supported by resilient demand ahead of the Lunar New Year holiday and Christmas.
Roger Yu (游智超), who tracks the flat-panel industry for Polaris Securities Co (寶來證券) said: “We are more cautious than AUO’s management, as customers could trim their orders later this quarter to hedge potential losses amid falling panel prices.”
This quarter’s average selling prices for PC and TV panels may fall by a rate in the low-single to mid-single digits from US$899 per square meter last quarter, reversing a price hike of 14 percent quarter-on-quarter in the July-September period, AUO said.
Meanwhile, AUO president Chen Lai-juh (陳來助) said the company did not see any cost benefits in building an advanced LCD plant in China.
But AUO still hopes that the government will scrap the ban on investing in LCD facilities in China before 2013, when South Korean competitors are expected to start production there.
The firm plans to build a second, 8.5-generation plant in central Taiwan and install equipment in the second half of next year.
AUO yesterday said that capital spending for this year would remain at between NT$70 billion and NT$75 billion.
AUO’s shares plunged 2.34 percent yesterday to NT$31.3, under-performing the benchmark TAIEX index, which lost 1.21 percent.
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