AUO shares boosted by Q2 results, Q3 outlook

Taipei, July 28 (CNA) Shares of AU Optronics Corp. (AUO), one of Taiwan's leading flat panel makers, got a boost from an improvement in its bottom line in the second quarter of this year, although AUO still recorded a net loss in the three-month period, dealers said.

Buying was sparked by optimism toward the current quarter, a traditional peak season in the world's flat panel industry, after AUO said that supplies of flat screens in the global market are expected to remain tight. The upbeat mood also spread to AUO's rival, Innolux Corp., which was scheduled to report its earnings the following day.

Shares of AUO attracted strong interest soon after the local equity market opened Thursday, in the wake of the second-quarter results and the third quarter outlook, and the momentum continued into the end of the session, although its gains were capped by some profit taking by the close.

AUO shares closed up 1.98 percent to close at NT$12.90 (US$0.40), off an earlier high of NT$13.35, with 203.03 million shares changing hands on the Taiwan Stock Exchange, where the weighted index ended up 0.15 percent at 9,076.64 points.

Innolux also closed up 1.27 percent at NT$12.00, with 127.05 million shares changing hands.

In terms of share turnover in volume, AUO topped the list compiled by the TWSE for Thursday, signaling that the stock generated strong trading interest, the dealers said.

In an investor conference held a day earlier, AUO reported that it posted NT$570 million in net loss for the April-June period, compared with NT$5.48 billion in net loss recorded a quarter earlier. Its earnings per share for the second quarter stood at NT$0.06, compared with NT$0.57 in loss per share a quarter earlier.

However, AUO recorded NT$120 million in net operating profit for the second quarter, with an operating margin of 0.1 percent, improving from a net operating loss of about NT$5.1 billion recorded a quarter earlier.

The flat panel maker said that the net loss for the second quarter came from non-operating losses, while its core business was strengthened at a time when global demand for TVs was on the rise, which pushed up flat panel prices in the quarter.

AUO said that the company shipped 28.46 million large-sized panels in the second quarter, up 16.5 percent from a quarter earlier, while its shipments of small and medium-sized screens also rose 12.6 percent from a quarter earlier to 42.50 million units.

The company said that in reflection of solid global demand, its core business is expected to continue to improve in the third quarter and even into the fourth quarter. AUO said it is possible that its production capacity will be fully booked in the second half of this year, adding that demand in the global market for this year is expected to become the strongest in a decade. (By Pan Chi-i and Frances Huang)