Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler, yesterday posted a second straight monthly growth in revenue to NT$45.07 billion (US$1.47 billion) last month, thanks to a pickup in smartphone demand.
Last month’s revenue marked its best performance since January.
On an annual basis, sales dipped 9.45 percent, the smallest annual decline since February, compared with NT$49.78 billion in May last year.
Photo: Ann Wang, Reuters
Revenue from smart consumer electronics products, primarily iPhones and smartphones for other brands, delivered a “strong” double-digit, month-on-month growth in May because of customers’ pull-in, Hon Hai said in a company statement.
That was the only business category that enjoyed a robust rebound last month.
Sales from computing products, components and other products were flattish on a sequential basis as customers were digesting excessive inventory, it said, adding that revenue from cloud and networking products was virtually unchanged.
“The revenue performance was in line with expectations,” the statement said. “The outlook for the second quarter remains unchanged from earlier guidance.”
Revenue would drop quarter-on-quarter and year-on-year during the April-June period, as demand usually softens during production transitions, it said.
Another factor is a relatively high base of comparison in the same period last year, as constraints on key component supply eased, the company based in New Taipei City’s Tucheng (土城) District said.
For the full year, the company is conservative about prospects, with revenue expected to be stable compared with last year, company chairman Young Liu (劉揚偉) told investors last month.
The COVID-19-pandemic-driven consumption of consumer electronics has ended and the outlook for demand remains dim because of an ongoing inventory correction, Liu said.
Hon Hai expects the PC industry’s inventory correction cycle to end by the end of this quarter, but it would take longer for the server sector to see inventory touch bottom, likely between the second and third quarters, Liu said at the time.
Server demand from the enterprise side was weak, but cloud-service providers such as Google and Amazon.com continued to show resilient demand, Liu said.
Artificial intelligence (AI) servers also performed well, as gaming companies joined cloud-service providers in adopting AI-related applications, he said.
Hon Hai expects demand for its consumer electronics to decline sequentially this quarter, he added.
Demand for its cloud, networking and computing products would be flat on a quarterly basis, whereas demand for components and other products would grow sequentially, he added.
During the first five months, Hon Hai accumulated NT$2.34 trillion in revenue, falling 2.08 percent from NT$2.39 trillion during the same period last year.
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