Slow season effects are expected to continue affecting Hon Hai Precision Industry Co’s (鴻海精密) shipments in the second quarter of this year, analysts said yesterday.
Hon Hai, the world’s largest contract electronics maker, could see its revenue for the April-to-June period fall below the NT$957.9 billion (US$29.73 billion) it recorded in the first quarter by a single-digit percentage, they said.
The analysts’ remarks came after Hon Hai on Wednesday reported weaker sales for last month, as the lingering slow season effects put a dent in the firm’s shipments of consumer electronics devices, although shipments of computing and communications devices remained little changed.
Consolidated sales declined 8.37 percent to NT$295.41 billion from the previous month and fell 2.05 percent from the previous year, the assembler of iPhones and iPads for Apple Inc said in a statement.
In the first five months of this year, Hon Hai’s consolidated sales dropped 5.56 percent from a year earlier to NT$1.58 trillion, company data showed.
Analysts said that as demand for consumer electronics is expected to continue to weaken this month, and the sales cycle of the iPhone 6S and iPhone 6S Plus models comes to an end, Hon Hai could have a worse second quarter than the first quarter in terms of revenue.
In addition, FIH Mobile Ltd (富智康), a handset manufacturing arm of Hon Hai, also saw its sales momentum in contract consumer electronics manufacturing slowing last month, putting the parent company at a disadvantage.
However, Hon Hai’s sales momentum could start to pick up in the third quarter, as Apple, which accounts for about 40 percent of the firm’s total sales, is expected to unveil its next-generation iPhones in September, analysts said.
Hon Hai is scheduled to hold an annual general meeting on June 22, at which its shareholders are expected to decide whether to approve the company’s proposal to issue a dividend of NT$5 per share, which would include a NT$4 cash dividend and a NT$1 stock dividend, for last year.
If the dividend proposal is approved, Hon Hai is expected to pay out more than NT$62.55 billion, the highest cash dividend payout in the company’s history.
On Wednesday, Hon Hai shares rose 0.25 percent to close at NT$81.3 on the Taiwan Stock Exchange.
The local equity market was closed yesterday and is to remain closed today for the Dragon Boat Festival holiday.
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