AU Optronics Corp (AUO, 友達光電), the nation’s second-largest LCD panel maker, yesterday posted a quarterly profit, its first in about a year, attributed to higher shipments and product prices.
During the quarter ending on Sept. 30, AUO swung into net profits of NT$4.62 billion (US$146 million), from losses of NT$804 million in the second quarter, the company said.
Earnings per share improved from minus-NT$0.06 to NT$0.51 over the same period.
On an annual basis, third-quarter net profits rose 36.6 percent, the company said.
Robust demand for televisions, driven by clients’ inventory build-up, helped lift AUO’s average selling price by 9.4 percent from US$340 per square meter in the first quarter to US$372 per square meter last quarter, the company said.
Due to rebounds in product prices, revenues rose 7.4 percent year-on-year to NT$86.02 billion, while gross margins grew from 6.9 percent to 13.1 percent and operating margins rose from 0.1 percent to 6.7 percent, company data showed.
SUPPLY CONSTRAINTS
“We saw critical supply constraints in all segments in the third quarter, usually a peak season as clients increase stocks in preparation for year-end holiday shopping,” AUO chairman Paul Peng (彭双浪) told a teleconference.
Peng said supply constraints would extend into the current quarter, because some global panel makers are expected to shut down their less advanced LCD factories, a move that is likely to give panel makers’ profitability a lift this quarter.
AUO said its factory utilization would become 100 percent loaded again this quarter as it did last quarter.
Average selling prices for PC and TV panels are expected to climb between 5 percent and 8 percent this quarter from last quarter, the company said.
UPBEAT OUTLOOK
During the first three quarters of this year, AUO made NT$780 million in operating profit, company data showed.
“Inventory demand usually goes down in the fourth quarter, but we have not seen any slowdown yet,” Peng said.
“We believe our business in the fourth quarter will be similar to the third quarter,” he said, adding that another profitable quarter is likely.
Based on the upbeat outlook for this quarter, the company aims to book profits for the year, as it has done for the past three years, Peng said.
AUO said it would spend as much as NT$50 billion on new facilities and equipment this year, including producing high-definition panels at a new plant in Kunshan, China. The company plans to supply smartphone panels made at the Jiangsu Province plant to its Chinese clients.
However, the company has no plans to invest heavily on making large-sized organic light-emitting-diode panels for TVs, or notebook computers, as it is still unclear about the investment return.
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