Hon Hai Precision Industry Co (鴻海精密), which assembles iPhones and iPads for Apple Inc, yesterday posted its weakest quarterly net profit in three quarters for last quarter following Apple’s inventory corrections and seasonal weakness.
Net profit plunged 54 percent quarter-on-quarter to NT$19.54 billion (US$647 million), or earnings per share (EPS) of NT$1.49, compared with NT$42.51 billion or NT$3.25 per share in the fourth quarter last year.
On an annual basis, the figure represented about 19.51 percent growth from NT$16.35 billion, or NT$1.38 for the same period of last year.
Hon Hai’s quarterly EPS surpassed the NT$1.32 forecast by Daiwa Capital Markets analyst Kylie Huang (黃奎毓) and NT$1.26 estimated by UBS Securities analyst Arthur Hsieh (謝宗文).
Ahead of the release of first-quarter results, analysts forecast Hon Hai would post a quarterly decline in net profit for last quarter as a result of Apple’s inventory adjustments for iPhone and iPad, and seasonal factors, according a report released early this month.
However, they also expected a potential upside to their estimates, considering the recent depreciation of the yuan and the lower royalty expenses due to smaller iPhone shipments.
Hon Hai’s gross margin improved to 6.04 percent last quarter from 5.7 percent in the previous year. That figure fell short of Huang’s forecast of 6.2 percent, but was higher than Hsieh’s 5.9 percent estimate.
But operating margin rose to 2.37 percent from 1.7 percent, outpacing the forecasts of 2.2 percent by Huang and 2.0 percent by Hsieh.
Meanwhile, Hon Hai’s board yesterday approved a proposal to distribute a cash dividend of NT$1.8 per common share, which is higher than NT$1.5 per share of cash dividend issued last year, according to a statement submitted to the Taiwan Stock Exchange.
The board also gave the go-ahead to issue 1.58 billion new common shares, according to a separate company filing. The share offering will raise about NT$13.94 billion fund based on the stock's closing price of NT$88.2 yesterday. Hon Hai said it plans to use the proceeds to expand capacity.
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