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.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
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