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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Proud_Infidel who wrote (6674)	8/7/2003 3:11:00 PM
From: Proud_Infidel	Read Replies (1) \| Respond to of 25522

UPDATE - Taiwan's AU hikes profit outlook as screen prices rise Wednesday August 6, 6:31 am ET By Baker Li (adds analysts quotes and details) TAIPEI, Aug 6 (Reuters) - Taiwan's AU Optronics Corp, the world's third-largest maker of computer display screens, reported surprisingly robust profits on rebounding screen prices and quadrupled its 2003 earnings forecast on Wednesday. AU Optronics (Taiwan:2409.TW - News; NYSE:AUO - News), which commands a global market share of around 12 percent, reported second quarter results that beat market estimates and credited cost-cutting and a wide range of products for outshining competitors. "The numbers are amazing. While we are upbeat on the demand side for the rest of the second half, supply will be kind of tight," said Yuanta Core Pacific Securities' technology analyst Steven Tseng, adding that meant prices would likely go up. Where computer monitor demand has helped in the past, AU -- like its bigger rivals in South Korea -- is also betting heavily on flat-screen television demand for future profits. Large panels for flat screen TVs will make up around one-fifth of AU's revenues next year, well above an estimated three percent this year, analysts said. AU's April-June earnings fell 25 percent from a year earlier to T$2.92 billion (US$85 million) as recovering screen prices were still relatively low. But the figure beat the average T$2.3 billion estimate produced by five analysts polled by Reuters. And compared to the first quarter, net profit jumped by 15 times as demand for AU's sleek thin computer screens picked up along with the global economy. AU raised its 2003 pretax profit forecast to T$10.51 billion from T$2.58 billion, and predicted full-year sales at T$90.5 billion, up from an original forecast of T$89.8 billion. "I think the big revision in earnings is due largely to cost reduction and a shift to LCD TVs with fatter profit margins," said Alex Wu, an analyst at KGI Securities. Margins of screens used for large liquid crystal display (LCD) TVs are around 30 percent, while those for LCD monitors and notebook computers hover at around 15-23 percent, Wu said. SHARES OUTPERFORM AU, which sells to Dell Computer Corp (NasdaqNM:DELL - News) and Hewlett-Packard Co (NYSE:HPQ - News), announced results after close of Taipei trade on Wednesday. Its stock rose 0.62 percent to T$32.70, defying a 0.64 percent drop in the main market (Taiwan:^TWII - News). The stock has jumped 93 percent from a trough in late April, triple the 30 percent gain on the mainboard, as investors anticipated the improved earnings. Based on its new 2003 earnings per share forecast of T$2.46, the shares are trading at a P/E of around 13.3 times. Monitor screen prices fell from a high of $250 per unit in early 2002, but the average selling price of a standard 15-inch thin film transistor liquid crystal display (TFT-LCD) has since rebounded from around $175 earlier this year to about $200. AU's local rivals, such as Chi Mei Optoelectronics Corp (Taiwan:3009.TW - News), have also posted sharp quarter-on-quarter profit rises as demand for flat-screen monitors and notebook PCs increased. The world's biggest maker of flat computer screens, Samsung Electronics (KSE:05930.KS - News), saw its second quarter net slump 41 percent as prices for its memory chips and flat screens fell. AU's ambitious plan to spend $5.8 billion to diversify into the large, thin-screen television market could pay off, but pales in comparison to Samsung and LG Electronics, which plan to spend a combined $19.6 billion on big screen televisions. Demand for liquid crystal display (LCD) flat-screen TVs is expected to double almost every year to hit 31.9 million units in 2007 from 1.7 million units in 2002, analysts said. Some have compared the replacement demand for LCD televisions to the boom seen in the 1970s when viewers swapped their black and white sets for colour ones, but others warn a supply glut could be looming in the fourth quarter or early next year. ($=T$34.4)