LCD panel maker AU Optronics Corp (AUO, 友達光電) yesterday reported a narrower net loss for the second quarter compared with the previous quarter and gave a cautiously optimistic outlook for this quarter.
While the company last quarter was still in the red for the sixth straight quarter, the smaller loss came as its revenue increased 18.3 percent quarter-on-quarter and profit margins fared better than expected.
AUO said the rising revenue showed that the panel supply chain, disrupted by COVID-19-related shutdowns, had progressively returned to normal, and the stay-at-home trend had continued to drive strong demand for related applications, such as information technology and medical devices.
“As result, the extent of losses has further improved from the previous quarter,” AUO said in a statement following its quarterly earnings call.
“In terms of the financial structure of the company, the net debt-to-equity ratio was 27.2 percent, which remains at a healthy level,” the company said.
AUO lost NT$2.96 billion (US$100.3 million) in the second quarter, compared with a net loss of NT$4.99 billion in the first quarter. In the same quarter a year earlier, the company lost NT$2.68 billion.
Losses per share came in at NT$0.31, compared with NT$0.53 in the previous quarter and NT$0.28 a year ago, the company’s financial statement showed.
Consolidated revenue for the April-to-June quarter was NT$63.5 billion, up 18.3 percent quarterly, but down 9.37 percent annually, AUO said.
Gross margin returned to positive territory last quarter at 2.7 percent compared with a quarter earlier, but was still down by 0.13 percentage points from a year earlier.
Operating margin was minus-5.36 percent, improving from minus-10.15 percent in the first quarter, but faring worse than minus-4.88 percent in the same quarter last year.
Overall, as cumulative revenue in the first half of the year decreased 14.3 percent annually, and as gross and operating margins were no better than their levels in the same period last year, AUO reported a net loss of NT$7.95 billion, or losses per share of NT$0.84, in the January-to-June period.
That compares with a net loss of NT$6.37 billion it posted a year earlier.
The company maintained a cautiously optimistic outlook for this quarter, saying that business would be supported by a health channel inventory and restocking demand.
“However, the effects of the COVID-19 pandemic and other uncertainties on the economic outlook should still bears watching,” AUO said, referring to a second wave of COVID-19 infections, the US presidential elections and geopolitical tensions.
In the second quarter, the company’s large-sized panel shipments rose 37 percent from the previous quarter, but shipments of small and medium-sized panels decreased 1.5 percent.
For this quarter, large-sized panel shipments would likely increase by 6 to 8 percent sequentially, while those of small and medium-sized panels might fall by 3 to 4 percent, AUO said.
Factory utilization rate this quarter is expected to remain at the same level of 90 percent as in the previous quarter, it said.
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