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Foreign brokerages divided over AUO's outlook

Foreign brokerages divided over AUO's outlook

Taipei, Jan. 31 (CAN) Foreign brokerages have been divided about earnings outlooks for AU Optronics Corp. (AUO, ??), one of Taiwan's leading flat panel makers, after the company impressive but still lower-than-expected results for 2014 earlier this week. In an investor conference held Thursday, AUO reported that it posted NT$18.07 billion (US$574 million) in net profit in 2014, a new high of six years, up 324.7 percent from a year. Its earnings per share stood at NT$1.83 in 2014, compared with NT$0.45 recorded a year ago. It was the second consecutive year for the flat screen supplier to make a profit as the global panel business staged a rebound on solid demand. But in the fourth quarter, AUO's net profit fell 9.9 percent from the third quarter and dropped 1.1 percent from a year earlier to NT$6.58 billion with EPS of NT$0.62, down from the previous quarter's NT$0.76, after the flat screen supplier paid NT$1.3 billion in income tax, higher than an earlier market estimate. A day after the 2014 earnings release, shares of AUO fell 6.23 percent to close at NT$17.30 with 200.31 million shares changing hands. Led by AUO shares' plunge, the bellwether electronics ended down 0.98 percent, and the benchmark weighted index closed down 0.69 percent. Credit Suisse said that it was bothered by AUO's lower-than-expected earnings in the fourth quarter resulting from the higher tax payments. In addition, the brokerage said that the gross margin of 14.8 percent for the three month period was also worse than expected. Also worried over slow season effects in the first quarter of this year, Credit Suisse said that it has lowered a target price on AUO shares to NT$15.8 from NT$16.1 while leaving its "neutral" rating unchanged. CIMB Securities also took into account AUO's fourth quarter results that missed the mark, cutting its target price on the stock to NT$18.45 from NT$20.1 and maintaining a "hold" recommendation. CLSA, on the other hand, said that AUO's fourth quarter earnings were in line with the medium value of the market's earlier forecasts and the brokerage remains upbeat about shipments for the first quarter of 2015.
CLSA said it has raised its target price on AUO shares to NT$21 from NT$16.5 and left an "outperform" rating unchanged. Macquarie Securities was similarly optimistic, maintaining an "outperform" rating on AUO shares and raising its target price on the stock to NT$21.3 from NT$17.1. (By Lo Hsiu-wen and Frances Huang)


Updated : 2021-09-28 20:01 GMT+08:00