Hon Hai Precision Industry Co (鴻海精密) yesterday said that its second-quarter financial results met the company’s expectations and forecast that third-quarter revenue would be higher than the second quarter, but lower than a year earlier.
Net profit was NT$22.88 billion (US$774.5 million) last quarter, skyrocketing 998 percent from the previous quarter and rising 34 percent from a year earlier.
That translated into earnings per share of NT$1.65, up from NT$0.15 in the first quarter and NT$1.23 a year earlier.
Photo: CNA
Second-quarter revenue was NT$1.13 trillion, a 21 percent increase from the previous quarter, but a 3 percent decline from a year earlier.
Gross margin was 5.91 percent, up 1.4 percent quarter-on-quarter and 0.6 percent year-on-year, company data showed.
“On our May 15 news conference, we forecast that second-quarter revenue would increase by 15 percent sequentially and decrease by a single-digit percentage annually. We have met the guidance set at the time,” Hon Hai chief financial officer David Huang (黃德財) told an investors’ conference at the company’s headquarters in New Taipei City’s Tucheng District (土城).
“Looking forward to the third quarter, we expect total revenue to show single-digit growth from the second quarter, but decline by double digits from the same period last year,” Huang said.
Delays in the launch of new mobile phones caused by the COVID-19 pandemic would continue into the third quarter and affect Hon Hai’s core phone manufacturing business, he added.
Hon Hai chairman Young Liu (劉揚偉) refused to respond to questions about the company’s key customer, Apple Inc.
He said that it has been Hon Hai’s long-standing policy not to comment on individual customers.
“If you want to know what is going on with Apple, you should ask Tim Cook,” Liu quipped, referring to the US company’s chief executive officer.
Institutional investors at the conference were curious about how a newly formed alliance between Luxshare Precision Industry Co (立訊精密) and Wistron Corp (緯創) would affect Hon Hai’s phone assembly business.
Liu said it is “very normal” to have competitors and “it shows that this business is worth doing.”
“We have been hearing a lot about Luxshare... We look forward to seeing for ourselves,” Liu said. “Our relationship with customers was not built in a day.”
Hon Hai has about 30 percent of its production capacity outside of China.
“We have been investing in Mexico, Brazil and Southeast Asia to prepare for the needs of our customers,” Liu said.
“There will be two systems in the coming world, with one centering on the United States and the other focusing on China,” he said.
“The coming trend is regional manufacturing. There is not going to be such a thing as a ‘world factory’ anymore, so there is no question of India replacing China,” he added.
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