Hon Hai Precision Industry Co (鴻海精密), one of the main assemblers of Apple Inc’s iPhones, yesterday reported an annual decline of 9.24 percent and a 47.91 percent quarterly drop in net income to NT$27.57 billion (US$847.21 million) last quarter.
Earnings per share were NT$1.76, compared with last year’s NT$1.8 and the previous quarter’s NT$3.38, according to a company filing with the Taiwan Stock Exchange.
The results were slightly below the market’s consensus estimate of NT$28 billion, or NT$1.8 per share, a reflection of softer iPhone sales than a year earlier.
Gross margin was 7.05 percent, down 0.09 percentage points from last year’s 7.14 percent and 0.06 percentage points from the previous quarter’s 7.11 percent.
Operating margin fell 0.12 percentage points annually and 0.11 percentage points quarterly to 3.69 percent, the filing said.
Consolidated revenue totaled NT$958 billion, representing a 6 percent annual decline and a 33 percent quarterly drop.
A market analyst, who declined to be named, said Hon Hai’s annual drop in earnings was expected, as shipments of iPhone 6 and 6 Plus devices were delayed in China from September 2014 to the first quarter of last year.
“The delayed shipments in China resulted in a stronger than usual sales and profit performance for Hon Hai in the first quarter last year... This year’s result [last quarter] was mainly reflected a normal slow season for consumer electronics products,” the analyst said.
HSBC Securities Taiwan Corp said Hon Hai’s revenue this quarter would drop 1.56 percent sequentially to NT$943 billion, as Apple recently said its sales would contract by between 15 and 19 percent quarterly this quarter.
Therefore, there is a downward risk for Hon Hai’s margin this quarter, HSBC analyst Jenny Lai (賴惠娟) said in a report on April 29.
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