AU Optronics Sees Quarterly Growth, Annual Decline

LCD panelmaker AU Optronics said its net profit more than tripled to USD 4.32 billion last quarter from a quarter earlier, propped up by customers building up their inventory ahead of the year-end shopping season, which helped boost panel prices.The company made USD 1.25 billion in the second quarter. Gross margin rose to 10.7 percent from 9.7 percent a quarter earlier, AUO said.

On an annual basis, net profit more than halved from USD 8.86 billion.

However, AUO said that the escalating US-China trade spat would add uncertainty to electronics demand, which is already affected by currencies weakening against the US dollar, company chairman and chief executive officer Paul Peng told investors.

The imposition of a 10 percent tariff on USD20 billion of Chinese goods, which took effect in September, did not curtail demand last quarter, but electronics makers are likely to raise their prices for those products to cope with cost increases, Peng said.

Besides, it is still unknown whether the tariff list would be extended to include more consumer electronics or for a longer period of time, Peng said. For the short term, AUO said it expects seasonal weakness this quarter to cut its shipments of PC and TV panels by a low single-digit percentage quarter-on-quarter.

Average selling prices are to drop slightly in US dollar terms, the company said.“ The uncertainty is to impact the (outlook) for the fourth quarter,” Peng said. “Aside from that, there is still (TV panel) demand from China for the New Year holiday shopping season.”

AUO plans to keep its factory utilization rate at more than 95 percent, but that might change if the company arranges for equipment to undergo annual maintenance when demand slows down, Peng said.

Last quarter, AUO saw 60 percent annual growth in 75-inch TV panel shipments, the company said, adding that it is likely to extend as TV vendors are to make 75-inch models the focus of their promotions.

Innolux a flat panel manufacturing arm of Hon Hai Precision Industry swung back into a net profit of USD 1.9 billion last quarter from a net loss of USD 1.93 billion in the second quarter.

Gross margin rose to 10.1 percent last quarter form 8.8 percent a quarter earlier.Innolux expects shipments of PC and TV panels to shrink by a mid-single-digit percentage this quarter from last quarter, while average selling prices are to increase by a low single-digit percentage this quarter.— Taipei Times

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