Taipei, Shares of AU Optronics Corp. (AUO), one of Taiwan's leading flat panel makers, came under pressure Friday after the company reported another loss in the second quarter, dealers said.
The pressure was also ignited by worries over an ongoing global supply glut, which has kept product prices down and undermined the profitability of flat panel makers, they said.
Shares of AUO fell 2.50 percent to close at NT$8.59 (US$0.28) with 73.60 million shares changing hands on the Taiwan Stock Exchange, where the weighted index ended down 0.45 percent at 10,891.98.
Selling in AUO also spread to Innolux Corp., another major flat panel supplier, which lost 1.24 percent to close at NT$7.18. Led by the two heavyweights, the optoelectronics subindex ended down 1.30 percent.
AUO shares saw heavy selling as soon as the market opened and were down 2.95 percent at one point early in the session after the company reported another net loss for the AprilJune period at an investor conference Thursday, dealers said.
AUO posted a net loss of NT$2.68 billion and a loss per share of NT$0.28 for the quarter after posting a net loss of NT$3.69 billion and a loss per share of NT$0.38 a quarter earlier. Consolidated sales were up 5 percent quarteronquarter to NT$70.07 billion.
The secondquarter figures fell well short of AUO's results in 2018 Q2, when it posted NT$1.25 billion in net profits, earnings per share of NT$0.13, and consolidated sales of NT$75.05 billion.
While the net loss in the second quarter was lower than in the first quarter, investors were still concerned about a global supply glut in the flat panel sector and cut their holdings in AUO shares throughout the day, dealers said.
The second quarter results dragged down AUO's American depositary receipts by 4.55 percent, which also put downward pressure on the stock in the Taiwan market, they said.
AUO Chairman Paul Peng blamed the supply glut in the first half of 2019 on moves by Chinese flat panel makers in the second half of 2018 to increase their production capacity.
Although the flat panel industry will enter its traditional peak season in the third quarter, Peng remained cautious about AUO's prospects as Chinese producers continue to push up production, and he said a supply glut could become a norm over the next few years.
Also exacerbating the supply glut is weaker global demand resulting from trade tensions between the United States and China, so the industry will continue to see risks in the third quarter, Peng said.
AUO was able to narrow its losses in the second quarter by tailoring a wide range of products to customers' needs, Peng said.
According to AUO, TV panels accounted for 36 percent of its total sales in the second quarter, while monitors made up 15 percent, and screens for mobile PC production and other devices represented 26 percent and 23 percent, respectively.
During the threemonth period, AUO shipped 27.17 million largesized flat panels, up 5 percent from a quarter earlier, while shipments of small and mediumsized screens totaled 33.01 million units, up 32.2 percent.
Source: Focus Taiwan News Channel