Taipei, April 26 (CNA) The net profit of leading Taiwanese flat panel supplier AU Optronics Corp. (AUO) fell more than 50 percent from both the previous quarter and the same quarter the previous year, the company said before the market opened Tuesday.
In a statement, AUO reported first quarter net profit of NT$5.16 billion (US$176 million), down 51.6 percent from a quarter earlier and down 57.1 percent from the first quarter of 2021.
At the same time, AUO's consolidated sales of NT$81.53 billion in the quarter were down 12.4 percent from the fourth quarter of 2021 and down only 1.7 percent year-on-year.
AUO attributed the decline in net profit to weaker pricing power in the flat panel industry during the quarter, which was sparked by sluggish global demand amid rising inflation and geopolitical tensions sparked by Russia's invasion of Ukraine.
The weaker pricing power was reflected in the sharp decline in net profit relative to the much smaller fall in sales, and in significant drops in AUO's gross and operating margins.
AUO said its gross margin -- the difference between revenue and the cost of goods sold -- fell to 14.3 percent in the first quarter from 18.9 percent in the previous quarter.
Its operating margin -- the difference between sales and the sum of the cost of goods sold and operating expenses -- also moved lower to 6.5 percent, from 11.1 percent in 2021 Q4.
Shipments were also on the decline, with the 6.05 million square meters in flat panels delivered in the first quarter down 7 percent from the fourth quarter.
The negative news sent AUO shares tumbling on the Taiwan Stock Exchange. As of 12:49 p.m., they were down 3.67 percent at NT$17.05 per share, while the exchange's benchmark weighted index was up 0.36 percent at 16,681.04 on a limited technical rebound.
AUO said it expected the global flat panel market to continue to face uncertainty in the second quarter.
"In the face of these circumstances, the company intends to dynamically adjust its operating strategy and continue to implement its biaxial transformation," AUO said in the statement.
In terms of the so-called biaxial transformation, AUO said it will allocate more resources to develop premium, commercial, and highly-customized products, as well as vertically-integrated total solution services.
Last week, AUO President and Chief Operating Officer Frank Ko (柯富仁) warned that COVID-19 related lockdowns in China were having an adversarial impact on the supply chain of the global information communications technology industry, and he expected the negative effects to be felt throughout the second quarter.
Many Taiwanese companies have manufacturing bases in China, and Ko said they were particularly vulnerable to restrictions on the movement of people in several industrial Chinese cities.
●Origin：FocusTaiwan
●Link：https://focustaiwan.tw/business/202204260007
In a statement, AUO reported first quarter net profit of NT$5.16 billion (US$176 million), down 51.6 percent from a quarter earlier and down 57.1 percent from the first quarter of 2021.
At the same time, AUO's consolidated sales of NT$81.53 billion in the quarter were down 12.4 percent from the fourth quarter of 2021 and down only 1.7 percent year-on-year.
AUO attributed the decline in net profit to weaker pricing power in the flat panel industry during the quarter, which was sparked by sluggish global demand amid rising inflation and geopolitical tensions sparked by Russia's invasion of Ukraine.
The weaker pricing power was reflected in the sharp decline in net profit relative to the much smaller fall in sales, and in significant drops in AUO's gross and operating margins.
AUO said its gross margin -- the difference between revenue and the cost of goods sold -- fell to 14.3 percent in the first quarter from 18.9 percent in the previous quarter.
Its operating margin -- the difference between sales and the sum of the cost of goods sold and operating expenses -- also moved lower to 6.5 percent, from 11.1 percent in 2021 Q4.
Shipments were also on the decline, with the 6.05 million square meters in flat panels delivered in the first quarter down 7 percent from the fourth quarter.
The negative news sent AUO shares tumbling on the Taiwan Stock Exchange. As of 12:49 p.m., they were down 3.67 percent at NT$17.05 per share, while the exchange's benchmark weighted index was up 0.36 percent at 16,681.04 on a limited technical rebound.
AUO said it expected the global flat panel market to continue to face uncertainty in the second quarter.
"In the face of these circumstances, the company intends to dynamically adjust its operating strategy and continue to implement its biaxial transformation," AUO said in the statement.
In terms of the so-called biaxial transformation, AUO said it will allocate more resources to develop premium, commercial, and highly-customized products, as well as vertically-integrated total solution services.
Last week, AUO President and Chief Operating Officer Frank Ko (柯富仁) warned that COVID-19 related lockdowns in China were having an adversarial impact on the supply chain of the global information communications technology industry, and he expected the negative effects to be felt throughout the second quarter.
Many Taiwanese companies have manufacturing bases in China, and Ko said they were particularly vulnerable to restrictions on the movement of people in several industrial Chinese cities.
●Origin：FocusTaiwan
●Link：https://focustaiwan.tw/business/202204260007
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