I know it won't last, but there's nothing wrong with enjoying today's good performance from Taiwan's AU Optronics (NYSE:AUO). Ongoing capacity expansion and fierce price competition from the likes of LG.Philips (NYSE:LPL), Samsung, and Sharp make another downswing all but inevitable, but at least the next few quarters should be good.

Fourth-quarter sales for this flat-panel maker jumped more than 84%, due mostly to a 68% jump in the number of panels shipped in the quarter. Large-panel shipments climbed 75% (to 9.6 million), while small- and medium-panel shipments rose 64% (to 15.9 million). Drawing too many conclusions from sequential statistics is dodgy in my book, but I would point out that large-panel shipments were up more than 20% sequentially, while small/medium shipments were down more than 9%.

Due partly to better utilization, I believe, the company was able to improve its gross margin (22.2%, versus 3.5% last year and 15.6% in the third quarter) and reverse a year-ago operating loss. Likewise, the company reversed a year-ago net loss and more than doubled its income on a sequential basis.

If there's a fly in the ointment, it might be on the cash flow statement, where capex exceeded operating cash flow by a significant amount. That's the crux of the problem for many investors looking at this industry -- can any of the pure plays get far enough ahead of their new capacity needs to produce real free cash flow? If they can, you've got a going concern for the long haul. If they can't, sooner or later this will all end badly.

For now, though, times are good. As electronics retailers like Best Buy (NYSE:BBY) and Circuit City (NYSE:CC) continue to sell truckloads of LCD TVs, AU Optronics is increasing its production of TV screens. This category made up more than one-fourth of sales in the fourth quarter, versus about 13% last year. I'm far from sanguine about the long-term future of any of these flat-panel players. But with reasonable pricing in TV screens and a likely demand boost from the World Cup, AU Optronics doesn't have to worry about the long term just yet.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares). Best Buy is a Motley Fool Stock Advisor recommendation. The Fool has a disclosure policy.