AU Optronics Forecasts Profitability in Q2 on Rising LCD Panel Prices

At its annual shareholder meeting Wednesday, Taiwan's AU Optronics, the world's third-largest LCD maker, said it expects to post a profit in the current quarter, citing a recovery in LCD panel prices that began in April. Analysts surveyed by Bloomberg estimate AU will earn NT$1.01 billion (approx. $30m) on average. A Reuters poll showed an average estimate of NT$1.546b (~$46m). AU reported a net loss of NT$5.11b ($154.7m) in Q1 and had net income of NT$182m (~$5m) last Q2. AU is expected to earn NT$8.9b (~$269m) in Q3 and NT$13.7b (~$415m) in Q4, according to Reuters Estimates. AU's chairman said factories are running at full capacity and its president mentioned plans to double capacity at its newest LCD factory by Q3 next year. Rival Samsung also sees a sustained recovery in LCD panel prices. Ordinary shares of AU Optronics were up 0.2% in late afternoon trading in Taipei after gaining as much as 1.8% intra-day. Its ADRs were unchanged at $16.66 in normal trading Tuesday.

Sources: Bloomberg, Reuters
Commentary: The Skinny on Flat Panels: Reduced Capacity Could Mean a Strong '08 • Sony: Gearing Up To Sell Flat Screens, Wal-Mart Style • Sony Launches Nine New LCD Flat-Panel TVs, Dell Exits Market
Stocks/ETFs to watch: AU Optronics Corp. (AUO) (Taipei: 2409). Competitors: LG.Philips LCD CO., Ltd. (LPL), Syntax-Brillian Corp. (BRLC), Philips Electronics NV (PHG), Sharp Corp. (SHCAY.PK), Matsushita Electric Ind. Co. Ltd (MC), Sony Corp. (SNE), Samsung [not traded in the U.S., but an 18% component of iShares MSCI S. Korea (EWY)]. ETFs: iShares MSCI Taiwan Index (EWT)
Conference call transcripts: AU Optronics Q1 2007

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