AUO, Fujitsu, STMicro and SAP post Q3 earnings

AU Optronics (AUO), which is  Taiwan’s second largest maker of liquid-crystal displays, has posted poor earnings for Q3.

The company announced a 97 percent plunge in its third-quarter profit, citing the fall of panel prices as the main problem. Net income dropped to $7.4 million (NT$227 million) in the three months ending in September, from $227 million (NT$7.42 billion) a year earlier.

For the third quarter, AUO said its large-sized panels exceeded 28.67 million units, down 3.2 percent quarter-over-quarter but up 7.4 percent year-over-year. It said shipments of small- and medium-sized panels reached around 55.59 million units, up 0.3 percent quarter-over-quarter but down 14.2 percent year-over-year.

For the first nine months of 2010, AUO’s large-sized panels totalled around 85.52 million units and small- and medium-sized panels topped 168 million units.

Andy Yang, chief financial officer of AUO said in a statement: “In the third quarter, the panel industry witnessed inventory adjustments by customers and lower-than-expected prices,”
Yang tried to reassure investors, saying: “Looking into the fourth quarter, AUO will continuously adjust its capacity utilisation rates based on market demands. We hope to continuously provide high value-added products and innovative R&D and technology.”

According to Digitimes AUO is planning to invest in a 7.5G TFT-LCD panel plant in China. The predicted overall investment amount from Taiwan to China will exceed $10 billion in 2010. However, it will need approval from the Investment Commission of Taiwan’s Ministry of Economic Affairs (MOEA) which may not happen by the year’s end.

The Investment Commission has announced total investment of US$8.65 billion from Taiwan to China for January-September 2010. A spokesperson for the Investment Commission said that all reviews are case-by-case. The investment amount announced by the Investment Commission only includes investments approved by the commission and it declined to comment on ongoing reviews.

The spokesperson denied that the MOEA has been told to control the total investment amount under $10 billion and it will not purposely delay the review of AUO’s project in order to avoid excessive concentration of investments in 2010.

Results were bleak for Fujitsu which also posted loses. Net profit for the July-September period fell 76 percent year on year, although its operating profit grew.

The Japanese technology giant recorded a group net profit of  $213 million (17.45 billion yen) for the fiscal second quarter, down 76 percent from last year’s $885 (45 billion yen)

Operating profit rose 96 percent to $454 million (37.16 billion yen) from $231million (18.92 billion yen) in the same period a year before, while revenue fell 3.7 percent to $13.45 billion  (1.100 trillion yen) from $13.96 billion (1.142 trillion yen.)

Meanwhile chipmaker STMicroelectronics had some success. Third quarter net revenues increased 16.8 percent on a year-over-year basis, with all regions and all market segments, excluding telecoms, posting revenue growth.

Regional growth was led by Greater China-South Asia with sales growth of 29 percent, followed by the Americas with a 27 percent increase. Net revenues growth of five percent were down to Greater China-South Asia and Japan-Korea with nine percent and sevent percent growth, respectively.

Its IMS and ACCI products grew revenues by 43 percent and by 29 percent, respectively. However its wireless sector decreased by 23 percent.

President and CEO Carlo Bozotti said in a statement: “Our third quarter financial performance reflected high demand for our products and the effective operating leverage of our model. ST reported both revenues and gross margin above the mid-point of our guidance range.

“These results underscore the quality of our product portfolio and validate our roadmap to enhance our return on invested capital. Our two largest product sectors, ACCI and IMS, both achieved record levels of sales in the quarter, with IMS surpassing one billion dollars in quarterly sales for the first time.”

Software company SAP enjoyed positive results with both revenue and profit rising in the July to September quarter.
Profits after tax were up 12 percent on the same period a year earlier at $694 million (€501 million)  and revenue also rose by 20 percent to $4.1 billion (€3 billion). Software and software-related service revenue was $3.17 (€2.3 billion) in the quarter, up 20 percent from the same quarter last year. Software revenue was up 25 percent at $906 (€656 million)