Pegatron Corp (和碩), one of Apple Inc’s iPhone assemblers, yesterday reported that net profit last quarter soared 1,483.6 percent from the previous quarter, as foreign-exchange gains helped cushion the impact of falling sales in communications devices, mainly handsets.
Net profit in the third quarter totaled NT$4.55 billion (US$146.4 million), compared with NT$287 million in the previous three months, the electronics manufacturer said in an earnings report released following the company’s conference call.
On an annual basis, net profit grew 5.8 percent from NT$4.296 billion.
Photo: CNA
While operating income last quarter increased 118.8 percent sequentially to NT$3.22 billion, non-operating income surged 1,614.2 percent to NT$4.46 billion, the company said.
Pegatron said it booked NT$153 million in foreign-exchange gains, reversing losses of NT$1.09 billion in the second quarter.
As a result, the company’s earnings per share came in at NT$1.69, the highest in the past seven quarters and higher than the market consensus estimate of NT$1.54.
Apart from handsets, Pegatron manufactures notebook and desktop computers, wearable devices, game consoles, servers and automotive electronics. It has also made early investments in artificial intelligence and robot-related products.
Third-quarter revenue was NT$257.86 billion, down 3.5 percent from NT$267.34 billion in the second quarter and missed the market consensus of NT$273.28 billion.
The company said the figure was also 12.4 percent lower than the NT$294.23 billion it posted for the same period last year.
It attributed the revenue decline to falling sales in the computing segment due to an unfavorable product mix, as well as double-digit sales declines in the consumer and communications segments, due to weaker end demand.
Last quarter, communications devices accounted for 60 percent of the company’s revenue, followed by computing products at 14 percent and consumer electronics at 8 percent, it said.
Revenue contributions from automotive electronics and servers remained limited, despite their higher margins compared with the company’s average gross margin of 4.2 percent registered in the quarter.
In the first three quarters of this year, Pegatron’s net profit totaled NT$9.14 billion, down 30.5 percent year-on-year, or earnings per share of NT$3.42. Revenue in the first three quarters edged down 0.1 percent to NT$797.63 billion, and gross margin fell 0.6 percentage points to 3.7 percent, it said.
For this quarter, demand for desktop and related equipment is expected to remain solid, driving sequential revenue growth in computing products, even though the notebook business enters a slow season, the company said.
The company said it expects quarter-on-quarter revenue growth in consumer electronics, driven by increased demand for game consoles, and in communications products during the holiday season.
Pegatron said its automotive electronics business is expected to grow significantly from the second half of next year to 2027, after it commences mass production and shipments to new clients.
Regarding the server business, the company said it began shipping servers running on Nvidia Corp’s GB200 and GB300 chips in the second half of this year to certain customers, along with continued shipments of regular servers, mainly to tier-2 and tier-3 cloud service providers.
Pegatron said it holds a positive outlook for next year.
To meet the diverse needs of customers, the company has continued expanding production capacity in Mexico, India, Indonesia, Vietnam, Malaysia and the US, with non-China operations abroad accounting for 30 to 40 percent of its total capacity, up from 20 to 30 percent last year, Pegatron said.
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