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Talk of the Day -- TSMC biggest winner, AUO loses out in 1st half year

2012/08/02 21:07:47

Taiwan Semiconductor Manufacturing Co. (TSMC) outperformed other local listed companies in the first half of this year by posting a pre-tax operating profit of NT$81.58 billion (US$2.72 billion), according to media reports.

Based on financial reports released by 45 companies listed on the Taiwan Stock Exchange (TWSE) or over-the-counter market, the reports also said smartphone maker HTC registered the highest pre-tax EPS (earnings per share) of NT$16.93 for the six-month period.

Meanwhile, flat panel maker AU Optronics (AUO) was the biggest loser, incurring a loss of NT$25.87 billion during the January-June period. In the second quarter alone, the company lost NT$11.84 billion.

The following are excerpts from a special report in the Thursday edition of the United Evening News:

Although HTC posted the highest EPS in the first half of the year, its sales value hit only about 75 percent of the amount registered for the same period of last year, or about 16 million to 17 million units.

HTC's after-tax EPS stood at about NT$14.25, down more than 60 percent from the year-earlier level.

Market analysts said that as HTC's fundamentals may get even worse in the second half of the year, its annual EPS may end up at an eight-year low.

Largan Precision Co. posted the second highest pre-tax EPS among the 45 listed companies at NT$15.5 for the first half of the year, but the amount marked an over 20 percent drop from the year-earlier level. Its EPS for the quarter ending June 30 also fell by more than 20 percent year-on-year.

Nevertheless, financial experts said Largan could score a strong rebound in the third quarter of the year, with the launch of Apple Inc.'s iPhone 5.

Industry analysts also said iPhone 5's delivery would play a key role in determining Q3 performances of local companies in the Apple supply chain.

While TSMC's share prices have remained weak in recent days, its Q2 sales reached a new quarterly high of NT$128.06 billion, up 21.4 percent from Q1.

The company's pre-tax EPS was about NT$3.15 and its Q3 sales are expected to increase by 6 to 8 percent to hit yet another quarterly high.

But market analysts forecast that TSMC may see a modest decline in Q4 sales because of inventory adjustments. The company's revenues are not expected to stage a strong rebound until the second quarter of next year, they added.

Compared with remarkable business records of the aforesaid companies, AUO lost out in the first half of the year, posting a bigger-than-expected loss of NT$26 billion.

The country's second largest flat panel maker has registered a quarterly loss of more than NT$10 billion for seven consecutive quarters.

Industry insiders said the global flat panel market has gradually regained momentum in the second quarter of the year. The flat panel division of South Korea's Samsung Group turned a profit in Q2 and another Korean firm LGD saw its loss shrink.

In comparison, AUO's Q2 loss still exceeded NT$10 billion and its capacity utilization rate was lower than expected.

AUO executives said at a recent investor conference that they remain optimistic about the company's future. They said AUO sales will increase in Q3 as China's six major TV brands will increase flat panel procurement to meet increased market demand ahead of the country's long National Day holiday in October. (Aug. 2, 2012).

(By Sofia Wu)