AUO reports bigger net loss in Q3, citing supply glut

Taipei-AU Optronics Corp. (AUO), one of the largest flat panel makers in Taiwan, on Wednesday reported an increase in net loss for the third quarter of the year, citing a supply glut on the global market.

At an investor conference, AUO reported a net loss of NT$3.99 billion, compared with NT$2.68 billion in net loss in the second quarter and NT$4.32 billion in net profit in the same period of last year.

Its loss per share for the third quarter was NT$0.41, compared with NT$0.28 in loss per share in the second quarter and NT$0.45 in earnings per share in the same period of last year.

In the July-September period, AUO said, it generated NT$70.05 billion in consolidated sales, little changed from the previous quarter.

While the third quarter is usually a peak season for the global flat panel industry, AUO said, the market saw a supply glut, which resulted in a continued drop in product prices.

AUO said that although its shipments of large-sized panels rose by a quarterly 5.5 percent and those of its small and medium sized screens grew 7.8 percent in the third quarter, its average selling price fell to US$312 per square meter from US$323 in the second quarter.

In the third quarter, TV panels accounted for 30 percent of AUO's total sales, monitors made up 15 percent, screens for PCs and mobile devices represented 29 percent, and displays for commercial devices made up 26 percent, the company reported.

At the investor conference, AUO Chairman Paul Peng (???) said Chinese flat panel suppliers continued to expand production, which adversely affected the global market.

The competition from China has caused product prices to drop and the profitability of the flat screen industry to deteriorate, he said.

While some suppliers have fully or partly suspended production amid the global oversupply, others need to exercise discipline to maintain a balanced supply and demand, Peng said.

The supply glut in the global flat panel industry is expected to continue into the fourth quarter, which is usually a slow season for the flat panel industry, he said.

In the face of that problem, AUO has been focusing on niche products such as panels for gaming consoles, high-end notebook computers and commercial computers, Cheng said.

AUO said it is also planning to adjust its capacity utilization rate and to develop new value added products for release next year.

Prior to the company's release of its third-quarter report, its shares closed unchanged Wednesday at NT$8.10 on the Taiwan Stock Exchange, where the benchmark weighted index ended up 0.41 percent at 11,380.28 points.

Source: Focus Taiwan News Channel