Shares of AU Optronics Corp (AUO, 友達光電), one of Taiwan’s leading flat-panel suppliers, came under heavy pressure yesterday morning after the company on Thursday reported a higher-than-expected tax payment in the fourth quarter of last year.
The decline in AUO stock also reflected a plunge in the company’s American depositary receipts on Wall Street overnight, amid cautious sentiment in the typically slow first quarter of the year, dealers said.
Concern over slow shipments in the January-to-March period eclipsed AUO’s strong results for the whole of last year, which was a good year for the global flat-panel market because of solid demand, particularly for large-sized screens, dealers said.
AUO shares plunged 6.23 percent to NT$17.30, while AUO’s competitor Innolux Corp (群創) saw its stock price fall 3.75 percent to NT$15.40.
The TAIEX was down 0.69 percent.
“AUO’s income tax payment in the fourth quarter of last year was about 50 percent higher than the market estimate,” Ta Ching Securities (大慶證券) analyst Andy Hsu said. “As a result, the company reported a lower-than-expected net profit for that quarter.”
He said that investors who had picked up the stock before the earnings report seized the tax figure as a reason to lock in their recent gains soon after the local bourse opened.
At an investor conference on Thursday, AUO reported NT$6.58 billion (US$208.42 million) in net profit for the fourth quarter of last year, a quarterly drop of 9.9 percent, but a year-on-year increase of 1.1 percent.
The company said its fourth-quarter earnings per share fell last year to NT$0.62 from NT$0.76 in the third quarter after it paid more than NT$1.3 billion in income tax.
For the whole of last year, AUO posted NT$18.06 billion in net profit, an annual increase of 342.7 percent and its highest profit in six years. Its earnings per share reached NT$1.83.
Hsu said that the company’s earnings last year largely reflected a recovery in large flat-panel demand, in particular for TV screens, which boosted panel prices.
“But investors have shifted their attention to the future and are worried about the first quarter of this year, as TV flat-panel prices are showing signs of declining,” Hsu said.
Hsu forecast that AUO and Innolux would face more pressure in the second half of the year, when Chinese and South Korean manufacturers are expected to boost production capacity.
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