Even with low expectations for the quarter, AU Optronics (NYSE:AUO) wasn't even able to meet those, as losses continue to mount at the company.
Ticonderoga says, "AUO reported 4Q10 consolidated sales of NT$102.6 billion (down 17.5% Q/Q). In U.S. dollar terms, 4Q10 sales came in nearly 12% lower sequentially at US$3.52 billion and below our US$3.76 billion forecast. AUO reported an EPS of negative $0.45, much worse than our projection of negative $0.07. Despite reporting the most challenged quarter since 1Q09, we believe that investors are likely to once again search for a bottom in the shares. However, we believe any recovery will be muted as the secular shift toward LCD TV slows and the economics of the panel industry remain challenged. With a slowing secular trend in the LCD market we believe investors are likely to pay an incrementally lower multiple for LCD-related names through each cycle. We continue to remain unexcited by our LCD coverage universe, which also includes LG Display (NYSE:LPL)(Sell) and Corning (NYSE:GLW)(Sell).
"For 1Q11, we are raising our revenue estimate to $3.38 billion from $3.28 billion, and we expect AUO to post a loss of $0.10 per share compared with our previous expectation of a loss of $0.13 per share. For 2011, we are raising our revenue estimate to $14.52 billion from $13.92 billion and increasing our EPS projection to $0.36 from $0.17."
Ticonderoga maintains a 'Neutral' rating on AU Optronics (AUO), which closed Friday at $9.58, down $0.29, or 2.94 percent.
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