Hon Hai Precision Industry Co (鴻海精密) felt the squeeze from last year’s delayed launch of Apple Inc’s iPhone X, the latest results from the world’s largest electronics contract manufacturer show.
Were it not for a one-time gain of US$2.2 billion from the sale of Sharp shares, it would have been the company’s worst holiday quarter since 2010, analysts said.
Hon Hai on Friday last week reported net income of NT$71.7 billion (US$2.5 billion) in the three months that ended on December last year, based on calculations using previously reported earnings. That exceeded the NT$58 billion average estimate of analysts. Fourth-quarter revenue reached an all-time high of NT$1.73 trillion. Earnings per share (EPS) were NT$4.14.
Analysts point to Hon Hai’s December sale of ￥352.5 billion (US$3.32 billion) of Sharp shares to ES Platform LP, a partnership formed by company employees, as the main reason for the iPhone maker’s better-than-expected results.
“The main profit gains came from the non-operating end. Hon Hai disposed of Sharp’s special shares in the same period, recognizing up to NT$66 billion,” Fubon Securities Co (富邦證券) analyst Arthur Liao (廖顯毅) said in a note. “Without this, EPS in the quarter would only be around NT$1.44.”
EPS would have been about NT$1.28 without the gain from the Sharp sale, Vincent Chen (陳豊丰), regional head of research at Yuanta Securities Investment Consulting Co (元大投顧), said in a note.
Based on the analysts’ calculations, Hon Hai’s fourth-quarter net income would have been less than NT$25 billion without the sale of Sharp shares. That would have been the company’s lowest fourth-quarter figure in seven years.
Bloomberg calculated that operating profit was NT$32.4 billion. The gross margin and the operating profit margin missed estimates.
Hon Hai shares fell 3.17 percent to close at NT$88.50 on Saturday, with 136.29 million shares changing hands, while the TAIEX ended up 0.12 percent at 10,919.49 points.
Full-year net income was NT$138.7 billion, falling for the first time since 2008, as profits took a hit in the second half of last year, partly on delayed iPhone X shipments.
Despite reports of lackluster demand for the device, Apple chief executive officer Tim Cook said on an earnings call in February that the iPhone X was the best-selling smartphone over the holidays, citing research firm Canalys.
Hon Hai is the sole maker of Apple’s priciest gadget.
The company gets more than half of its revenue from Apple, but chairman Terry Gou (郭台銘) is looking for ways to expand beyond merely assembling gadgets — especially as the smartphone market sputters.
He is taking Foxconn Industrial Internet Co (FII, 富士康工業互聯網), a subsidiary focused on cloud services and “smart” manufacturing, public in China.
In a March 13 note, Liao estimated FII’s market value could hit 269 billion yuan (US$42.79 billion) compared with Hon Hai’s US$56 billion.
Hon Hai does not provide revenue breakdowns, forecasts or hold investor conferences.
A Foxconn spokesman did not provide details on the sale of Sharp shares.
Until US President Donald Trump’s return a year ago, when the EU talked about cutting economic dependency on foreign powers — it was understood to mean China, but now Brussels has US tech in its sights. As Trump ramps up his threats — from strong-arming Europe on trade to pushing to seize Greenland — concern has grown that the unpredictable leader could, should he so wish, plunge the bloc into digital darkness. Since Trump’s Greenland climbdown, top officials have stepped up warnings that the EU is dangerously exposed to geopolitical shocks and must work toward strategic independence — in defense, energy and
For the second year in a row, a Brazilian movie has wowed international audiences and critics, securing multiple Oscar nominations and drawing fresh interest in the Latin American giant’s film industry. Experts say the success of The Secret Agent, which has won four Oscar nominations, a year after I Am Still Here won Brazil its first Oscar, is no fluke, with a bit of a push from the country’s political climate. “This is neither a coincidence nor a miracle. It is the result of a lot of work, consistent policies, and, of course, talent,” Ilda Santiago, director of the Rio International Film
AI SPLURGE: The four major US tech companies have lost more than US$950 billion in value since releasing earnings and outlooks, while equipment makers were gaining Four of the biggest US technology companies together have forecast capital expenditures that would reach about US$650 billion this year — a flood of cash earmarked for new data centers and all the gear within them. The spending planned by Alphabet Inc, Amazon.com Inc, Meta Platforms Inc and Microsoft Corp, all in pursuit of dominance in the still-nascent market for artificial intelligence (AI) tools, is a boom without a parallel this century. Each of the companies’ estimates for this year is expected either near or surpass their budgets for the past three years combined. They would set a high-watermark for capital spending
IShowSpeed, a 21-year-old African-American influencer, has raced a cheetah, leapt with Maasai warriors and drawn huge crowds in a month-long tour of Africa that has also busted cliches about the continent. The YouTube and Twitch star’s tour, which started on Dec. 29 last year, took him to 20 countries, showing his tens of millions of followers a different side of Africa as he visited a diamond mine in Botswana, discovered Ethiopia’s rich cuisine and attended the Africa Cup of Nations football final in Morocco. IShowSpeed — born in Cincinnati, Ohio as Darren Jason Watkins Jr. — is one of the most followed
RSS