AU Optronics Q3 loss widens, cuts capex further

Reuters News
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Posted: Oct 25, 2011 2:19 PM
AU Optronics Q3 loss widens, cuts capex further

By Clare Jim

TAIPEI (Reuters) - Taiwan's AU Optronics Corp, the world's No.4 LCD maker, posted a worse-than-expected loss in the third quarter, citing falling panel prices, and said it does not see a speedy recovery in the industry in the coming one to two quarters.

The company also further slashed its capital spending this year to T$60 billion from a previous forecast of T$70 billion in July and T$95 billion seen at the beginning of the year. It plans spending of no more than $40 billion in 2012, to cut costs.

Panel makers are struggling with falling prices due to weakening demand for demand for TVs, desktop monitors and notebook PCs in top markets.

South Korean flat-screen maker LG Display, the second largest LCD maker, posted its biggest quarterly loss last Thursday as tepid demand for televisions and computers hit panel prices and one-off losses weighed.

It said it expected panel price falls to slow in the current quarter from the previous quarter.

AU, which supplies major brands such as Hewlett-Packard, Dell Inc and Sony Corp, posted a net loss of T$15.796 billion ($524.3 million) for July-September. It was the fourth consecutive quarterly loss for the company.

Nine analysts had expected AU to post a net loss of T$12.01 billion, according to a consensus forecast polled by Thomson Reuters I/B/E/S. It reported a net profit of T$227 million in the same period a year earlier but a net loss of T$10.77 billion in the previous quarter.

"We didn't see any improvement in the industry in the third quarter; we don't expect any speedy recovery in the coming one to two quarters either," acting President Max Cheng told an investor conference.

It saw fourth-quarter big panel demand for both TVs and computers softer than the previous quarter but price changes would be more moderate. Demand for small panels was expected to go down seasonally but panels for smartphones would remain robust.

AU shares have plunged 58.6 percent so far this year, versus a drop of 16.5 percent in the boarder market.

(Editing by Jonathan Standing)