FOR IMMEDIATE RELEASE: 11/01/2016
DSCC Launches Display Supply Chain Financial Health Report – Highlights Revealed for 13 Players
Austin, TX -
Display Supply Chain Consultants (DSCC) has launched a new quarterly report covering the financial health of all publicly traded companies in the display supply chain. The Display Supply Chain Financial Health Report provides its clients with all of the critical data (income statements, balance sheet, cash flow, industry metrics), insights, market commentary and guidance released by publicly traded display supply chain companies in their quarterly earnings reports, stock exchange filings, press releases and conference calls along with unbiased analysis from DSCC analysts within 48 hours of their earnings calls.
Company analysis is provided in PowerPoint presentations while the financial and industry data is incorporated into pivot tables which makes comparisons by company, metric, layer of the supply chain, country, etc. extremely easy. In addition, the results are aggregated which results in the creation of industry averages across all financial and industry metrics.
According to DSCC CEO Ross Young, “This report could save its users thousands of hours per year in compiling and analyzing the financial health of their competitors, suppliers and customers. It will also be extremely useful in supplier audits and due diligence projects. This report also allows users to examine the health of each layer of the supply chain, establish benchmarks and determine winners and losers. Relying on Chinese, English, Japanese and Korean translation capability in a timely manner, it is available as an annual report or as a single issue.
Companies covered include:
- Equipment - Applied Materials, AP Systems, Avaco, Canon (Tokki), Coherent, Jusung, LIG Invenia, Nikon, Orbotech, SFA Engineering, SNU Precision, Terasemicon, TES, ULVAC, Viatron Technologies, V-Technology, Wonik IPS and Y.A.C.
- Materials - 3M, Asahi Glass, Corning, Idemitsu Kosan, LG Chem, Merck, NEG, Nitto Denko, Toppan, Toray, TPK and UDC
- Panels - AUO, BOE, CPT, CSOT, HannStar, Innolux, JDI, LG Display, Samsung Display, Sharp and Tianma
- OEMs - Compal, Foxconn, Pegatron, Quanta and TPV
- TVs and Phones - Apple, Changhong, Haier, Hisense, LGE, Samsung, Sharp, Sony and TCL
- Retailers - Amazon, Best Buy, Costco and WalMart
Today, results for the following companies were released:
- Asahi Glass
- BOE Technology
- LG Display
- LG Electronics
Some of the key findings from today’s distribution include:
The top 5 panel suppliers – Samsung Display, LG Display, AUO, BOE, Innolux – as well as #8 supplier CSOT released their Q3’16 results resulting in the ability to calculate some meaningful industry metrics on results to date.
- Q3’16 revenues were up 18% Q/Q and 1% Y/Y on ASP and unit growth. Only Chinese suppliers BOE and CSOT earned Y/Y growth causing their share of display revenues released to date to rise from 14% in Q3’15 to 18% in Q3’16.
- Gross margins for these six suppliers rebounded from 9% in Q2’16 to 14% in Q3’16. Gross profits were up 100% Q/Q and 4% Y/Y on higher ASPs and continued cost reductions. BOE maintained the highest gross margins of suppliers releasing this data.
- Samsung Display maintained the highest operating margins at 14%, at least 2X their closest competitor. While Samsung accounted for 31% of revenues of these six leading suppliers, it accounted for 57% of the operating profits. OLEDs are accounting for a dominant share of Samsung’s operating profits.
- Operating profits for the six suppliers were up 22% resulting in an 8% operating margin vs. -1% in Q2’16 and 6% in Q3’15.
- Blended ASPs were up 11% Q/Q while falling 12% Y/Y.
- Most suppliers exceeded Q3’16 revenue and earnings estimates.
- Q4’16 guidance was positive despite traditional seasonal weakness. Suppliers guided to sequential profit growth and flat to positive revenue growth on higher ASPs, strong demand, high utilization, lean channel inventories and continued cost reductions.
- 2017 guidance was also strong on limited supply growth with demand growth projected to exceed supply growth.
- Q3 revenues, earnings decline Y/Y on lower units in all products;
- Margins 1-2% lower than prior year on higher material costs, operating expenses;
- Q4 guidance soft, but helped by 14 week quarter (vs. 13 week Q4 in 2015).
- Revenue declining in yen terms, but increasing in US$;
- Electronics (display) business flat Q/Q, up 2% Y/Y as price declines offset volume increases;
- Strong improvement Y/Y in profitability for Glass and Materials business;
- Increased prices for architectural glass, increased volumes in automotive glass.
- Its Industry/Other business, which includes its lithography tools, Tokki evaporation systems and network cameras, were up 8% Q/Q and 25% Y/Y in $US and were its fastest growing business.
- While FPD and semi litho equipment sales were down with Canon behind Nikon in FPD losing share to Nikon in 2016, the evaporation and network camera businesses surged.
- Operating margins improved for this division to 4% vs. 1% a year ago
- Sales for the Industry Equipment Group, which includes Tokki, were up about 3X vs. Q3’15. For 2016, revenues for this group should rise 70% Y/Y and account for 25% of Industry/Other revenues.
- GAAP earnings overwhelmed by exchange rate issues and one-time effects;
- Core earnings up Q/Q and Y/Y on strong display business;
- Display Technologies remains profit engine, but other divisions are positive;
- Q4 Display guidance: flat to down slightly.
- Net loss in Q3 from heavy losses in Mobile Communications;
- Home Appliance has steady profits;
- Home Entertainment (TV) showed record profit on premium TV, OLED and UHD.
- Q3 revenues, earnings fall Q/Q and Y/Y due to Galaxy Note recall;
- IT and Mobile Communications division profit wiped out by recall, but all other divisions show strong profits;
- CE division and Display division both sustaining high profits based on strong premium TV market;
- Display extending its lead in operating margins on OLEDs.
- Revenues increased 4% Y/Y, both China and overseas business increased
- TCL continues to be challenged for profitability, net margin only 1%
- 25% increase Y/Y in TV units sales, but ASP declined 17%
Over the next week, the following companies will be added:
- Nitto Denko
- Tokyo Electron
- And more
Display Supply Chain Consultants (DSCC) was formed by experienced display market analysts from throughout the display supply chain and delivers valuable insights through consulting, syndicated reports and events. The company has offices in the US, China, Japan, Korea, Taiwan and the UK. DSCC is on the web at www.displaysupplychain.com and can be reached in the US at email@example.com or (770) 503-6318.