Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics manufacturer, saw its net profit for the first quarter of this year fall almost 20 percent from a year earlier because of higher operating costs.
In a statement released late on Friday, Hon Hai said it posted a profit of NT$14.4 billion (US$501 million), down 19.94 percent from the NT$17.99 billion recorded a year ago. Its operating expenses meanwhile rose 81.5 percent year-on-year to NT$19.16 billion.
The company, which manufactures iPhones and iPads for Apple, said it registered an earnings per share (EPS) of NT$1.49 for the January-March period, compared with NT$1.87 recorded a year earlier.
However, the first-quarter earnings were still better than what the market had previously expected. Earlier, Merrill Lynch had estimated Hon Hai’s EPS during the period would hit NT$1.38.
According to Hon Hai, its gross margin for the first quarter fell 4.52 percent from 4.72 percent a year earlier, while its operating margin was down 1.07 percent from 2.17 percent year-on-year.
While several brokerages, including Citigroup, Daiwa Securities and Merrill Lynch, have maintained their recommendation of a “buy” on Hon Hai shares, the stock has become a market laggard, as many investors were unhappy with its low dividend payout for last year.
On Friday, Hon Hai closed down 0.46 percent at NT$108.50, while the benchmark TAIEX fell 0.36 percent.