Hon Hai Precision Industry Co (鴻海精密) yesterday reported that its net income surged 55.47 percent year-on-year to NT$30.38 billion (US$992.42 million) last quarter, marking the highest profit for the January-March quarter in the company’s history.
The iPhone assembler’s earnings results beat market expectations of NT$28.36 billion. Earnings per share were NT$2.05 last quarter, compared with NT$1.33 a year earlier, the company said.
However, last quarter’s figure was 46.42 percent lower than the NT$56.71 billion it made in the previous quarter due to slow season effects.
Hon Hai’s gross margin of 7.14 percent last quarter outpaced consensus estimates of 6.8 percent and was higher than another iPhone assembler Pegatron Corp’s (和碩) 6.9 percent.
The company had maintained a gross margin of more than 7 percent for four consecutive quarters, according to its filings with the Taiwan Stock Exchange. Morgan Stanley attributed Hon Hai’s margin performance to better product yields and improved production efficiency.
The company’s board yesterday approved a proposal to distribute a cash dividend of NT$3.8 per share and a stock dividend of 5 percent based on last year’s net income of NT$132.48 billion, or NT$8.85 per share.
This marks the highest cash dividend in Hon Hai’s history. The company said it would distribute a total of NT$56.21 billion in cash to shareholders.
The planned dividend distribution translates into a cash payout ratio of 42.93 percent and a yield of 4.08 percent, based on the firm’s closing price of NT$93.10 yesterday.
Last year’s cash payout ratio was 22.05 percent.
Hon Hai’s board also approved a plan to issue overseas convertible bond of less than US$800 million this year, saying it would use the proceeds to purchase components from overseas, the company said in a filing with the Taiwan Stock Exchange.
In a note issued on Sunday, Morgan Stanley said it expects Hon Hai’s revenue this quarter to stay flat from last quarter’s NT$1.014 trillion, citing declining iPhone shipments and flattish growth in iPad shipments.
Hon Hai’s non-iPhone handset sales would grow quarter-on-quarter this quarter to offset the impact of slowing iPhone shipments at a time when Apple Inc is going through a product transition this quarter, Morgan Stanley analyst Jasmine Lu (呂智穎) said.
However, the company is likely to lose order allocation to Pegatron for Apple’s next-generation iPhone, which will slow down Hon Hai’s growth potential in the second half of this year, Lu said.
Hon Hai may also see falling contribution from Apple in the second half of the year because of declining iPad shipments, JPMorgan Securities Ltd said in a recent report.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
RSS