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AU Optronics 2Q loss below predictions

Post Time:Jul 24,2009Classify:Industry NewsView:446

TAIPEI: AU Optronics Corp, the world's third-largest maker of liquid-crystal displays, reported a smaller-than-expected loss in the second quarter, as rising demand from the mainland drove up panel prices.

The second-quarter net loss was NT$6.6 billion ($201 million), or NT$0.80 per share, compared with a profit of NT$20.4 billion, or NT$2.37, a year earlier, the Hsinchu, Taiwan-based company said yesterday. AU was expected to report a deficit of NT$10.73 billion, calculated as the median of 15 analyst estimates compiled by Bloomberg.

AU says it expects revenue to climb this quarter from the previous three months on increasing sales from the mainland.

In part, this is because demand in the current period may drive up prices, according to Bank of America Corp's Merrill Lynch & Co.

"The traditional seasonal demand in the second half and the October national holiday on the mainland should help boost the panel maker's revenue," Robyn Hsu of Capital Investment Trust Corp in Taipei said before the earnings were announced. Hsu oversees AU shares among the $3 billion he helps to manage at Capital Investment.

AU rose 0.4 percent to close at NT$38.20 before the earnings announcement, while the benchmark TAIEX index dropped 0.1 percent. The LCD maker's shares have climbed 55 percent this year after tumbling 59 percent in 2008.

Prices this quarter may rise by more than 10 percent from the previous three-month period, Chief Financial Officer Andy Yang said at an investors' conference in Taipei yesterday.

Demand for TVs on the mainland increased after the government announced plans to pay 20 billion yuan ($2.9 billion) in subsidies this year for home-appliance purchases in rural areas.

"We expect further momentum in the third quarter, given rising panel prices," Jeffrey Su, a Taipei-based Merrill Lynch analyst, wrote in a report last week.

AU plans to triple production capacity at its 8.5 generation plant to 30,000 sheets of glass a month by September from 10,000 in June, the company said in a statement.

AU also aims to start production at its new 7.5 generation plant by September, Yang said. The LCD maker said in December that it may delay the start of manufacturing at the factory from the original schedule of the third quarter because of oversupply in the industry.

Corning Inc, the world's biggest maker of glass for flat-panel televisions, said last month glass supply will be "very tight" until the end of the third quarter on rising demand.

Source: ChinaDailyAuthor: shangyi

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