AUO Posts NT$2.37 Billion Q3 Operating Loss as Display Technology Revenue Falls 11%

AUO posted a NT$2.37 billion operating loss in the third quarter as revenue fell from the previous quarter and its Display Technology business weakened. The company recorded a basic loss of NT$0.33 per share for the quarter.

Revenue was NT$66.88 billion, down 5.7% from the second quarter and 4.3% from a year earlier. Display Technology, which includes AUO’s panel operations, saw revenue decline 11% quarter over quarter as consumer electronics orders softened. Mobility Solutions revenue was roughly flat, while Vertical Solutions revenue increased 1% on steady shipments for retail, medical, commercial and industrial uses.

AUO’s gross margin was 10.1%, its operating margin was negative 3.5% and its EBITDA margin was 7.4%. The company tied lower gross profit to the smaller revenue base and said it would continue adjusting its product mix to improve profitability.

For the first nine months of the year, revenue totaled NT$206.8 billion and operating losses reached NT$2.79 billion. Pretax income was NT$241 million, while the net loss attributable to parent-company owners was NT$2.295 billion, or NT$0.30 per share. Income tax expenses and noncontrolling interests contributed to the attributable loss.

The board approved selling AUO’s phase 2 factory and related facilities in Taichung to Taiwan Semiconductor Manufacturing Co. for NT$38.8 billion. AUO estimated a disposal gain of about NT$18.5 billion.

For the fourth quarter, AUO expects brand customers to be more cautious with panel purchases as seasonal inventory buildup winds down. It said demand in vertical applications was relatively stable, while its automotive team was pursuing new projects. Management plans to monitor market supply and demand and adjust capacity and strategy.