Shares of Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract maker of electronics, and its subsidiary, Foxconn International Holdings Ltd (富士康), fell the most in two months after the companies’ results missed analysts’ estimates.
Hon Hai dropped near its daily limit, or 6.9 percent, to close at NT$70.20 in Taipei trading, its biggest decline since Jan. 8.
Foxconn, the world’s largest contract maker of mobile phones that is 72 percent owned by Taipei-based Hon Hai, slumped 15 percent to HK$2.19 in Hong Kong trading, its biggest fall since Jan. 9.
Credit Suisse Group AG yesterday cut its rating on Hon Hai to “neutral” from “outpeform.”
It said disappointing fourth-quarter earnings were probably because of a slower economy, reorganization costs and weak results from Foxconn.
Hon Hai’s costs climbed last year, while clients — including Nokia Oyj — posted profit declines as the global recession drained demand for electronics products such as handsets.
“Hon Hai reported disappointing 4Q08 net income,” Robert Cheng (鄭勝榮) and Jill Su, Taipei-based analysts at Credit Suisse, wrote in a report.
“We are concerned about its weak 1H09 margin and the macro uncertainties in 2H09,” they wrote.
Fourth-quarter net income dropped 65 percent from a year earlier to NT$9.3 billion (US$267 million), based on figures derived from full-year results Hon Hai reported after markets closed on Friday. The quarterly profit was lower than the NT$16.8 billion median of seven analyst estimates compiled by Bloomberg.
Foxconn had a net loss of US$21.1 million in the six months ended Dec. 31, compared with a profit of US$397.4 million a year earlier. Analysts predicted profit of US$72.5 million, based on the median of three estimates in a Bloomberg survey. Foxconn’s results were derived from full-year earnings reported by the Shenzhen, China-based company on Sunday.
Foxconn’s result is “much below expectation” and the company will probably continue losing money in the first half, Charles Guo, an analyst at JPMorgan Chase & Co in Hong Kong, wrote in a report yesterday. The brokerage said Foxconn’s clients project shipments would fall in the first three months of this year and JPMorgan predicted “no significant pickup” in the second quarter.
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
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ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip assembly and testing service provider, yesterday said it would boost equipment capital expenditure by up to 16 percent for this year to cope with strong customer demand for artificial intelligence (AI) applications. Aside from AI, a growing demand for semiconductors used in the automotive and industrial sectors is to drive ASE’s capacity next year, the Kaohsiung-based company said. “We do see the disparity between AI and other general sectors, and that pretty much aligns the scenario in the first half of this year,” ASE chief operating officer Tien Wu (吳田玉) told an
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