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Hon Hai’s net income drops 10% in first nine months

Hon Hai Precision Industry Co (鴻海精密), the nation’s top electronics component supplier, saw its net income in the first three quarters of the year drop 10.4 percent to NT$45.83 billion (US$1.39 billion) from NT$51.14 billion a year ago.

The net profit figures included bonus expenses in compliance with a new accounting rule that became effective on Jan. 1.

Hon Hai said in a statement released yesterday that revenues grew 27.4 percent to NT$1.05 trillion from NT$821.47 billion a year ago, while its gross margin slid to 4.3 percent from 5 percent during the same period.

Its net profit in the third quarter — calculated by deducting its first-half figures from the first nine months’ data — registered a 10.3 percent drop to NT$17.82 billion from NT$19.87 billion a year ago.

Third-quarter revenue was up a strong 38.2 percent to NT$431.21 billion from NT$312.08 billion a year earlier.

The company said in the statement it had gained a bigger share of the system integration business — proof of its success in providing end-to-end integrated solutions to strategic partners.

“Despite the general uncertainty and challenging environment ... the quarterly unconsolidated results were in line with company expectations,” Hon Hai spokesman Edmund Ding (丁祈安) said in the statement.

Hon Hai could enjoy healthy, long-term growth from its new notebook business, Yuanta Securities Corp (元大證券) said in a report released earlier this month.

Hon Hai makes notebook computers for Sony, its first customer in the laptop field.

Shares of Hon Hai rose 3.9 percent to NT$80 yesterday on the Taiwan Stock Exchange. The stock has dropped 60.4 percent since the beginning of this year, underperforming the benchmark index’s 42.7 percent decline during the same period.
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