Shares of Innolux higher after fourth-quarter results


CNA

TAIPEI — Shares of Innolux Corp., Taiwan’s largest flat panel maker, moved higher yesterday after the company reported a net profit in its core business in the fourth quarter after posting operating losses for nine consecutive quarters, dealers said.

Buying also reflected optimism toward sales of the global flat screen business, which will soon leave behind the slow season effects of the first quarter, they said.

At the end of trade, shares of Innolux closed up 2.5 percent at NT$16.40. “Innolux not only posted a net profit in its core business but also reported a better than expected figure,” Da Ching Securities analyst Andy Hsu said. “It seems that many investors are happy with the results.”

At an investor conference held Tuesday, Innolux announced an operating profit of NT$3.14 billion for the October-December period, compared with an operating loss of NT$2.21 billion post in the previous quarter.

It last posted a quarterly operating profit — of NT$11.43 billion — in the second quarter of 2010.

The market had expected Innolux to report an operating profit of about NT$2 billion based on a recovery in the global flat panel sector, Hsu said.

“The more than NT$3 billion in net profit in Innolux’s core business was encouraging because supply and demand in the global flat screen sector has been tilting toward a balance,” Hsu said.

After including provisions for anti-trust fines, interest payments and foreign exchange losses, the company still incurred a net loss of NT$3.22 billion, or NT$0.43 in loss per share, in the fourth quarter.

In the third quarter, the company’s net loss was NT$3.72 billion, or NT$0.51 per share.

But Innolux’s operating margin improved to 2.4 percent from a minus 1.7 percent in the third quarter, and its gross margin for the October-December period stood at 7.3 percent, up from 3.3 percent the previous quarter.

For 2012 as a whole, Innolux posted a net loss of NT$29.27 billion, or NT$4.04 in loss per share, compared with a net loss of NT$64.44 billion, or NT$8.76 per share, a year earlier.

The company’s operating loss in 2012 was NT$18.9 billion, down from a loss of about NT$63 billion in 2011.

Because the first quarter is a traditionally slow season in the high-tech sector, Innolux expected sales for the quarter to fall by up to 10 percent from the fourth quarter, when revenue stood at NT$129.60 billion.

“It was no surprise that the company came up with that sales estimate. But as the May 1 Labor Day holiday in China is approaching, I expect the flat panel sector will soon climb out of the slow season doldrums,” Hsu said.

Hsu cautioned, however, that with Innolux shares having gained ground since the local bourse reopened after the Lunar New Year holiday amid optimism over its bottom line, the stock could face stiff technical resistance at around NT$16.70.