Hon Hai Precision Industry Co (鴻海精密) reported third-quarter earnings of NT$36.98 billion (US$1.33 billion), up 24 percent quarter-on-quarter and 20 percent year-on-year, beating its own and analysts’ expectations, the company said yesterday.
Strong sales to their biggest customer, Apple Inc, which released its latest iPhone in the period, drove the gains.
Earnings per share rose to NT$2.67 last quarter, up from NT$2.23 in the third quarter of last year.
Photo: Ann Wang, Reuters
“The reason we were able to beat our expectations was the strong demand for our smart handset products, while cloud and personal computing sales were as expected,” Hon Hai chairman Young Liu (劉揚偉) told a virtual investors’ conference. “Sales of components and other products were slightly down due to the parts shortage crisis.”
The company expects the shortages to continue through the first half of next year, Liu said.
“I expect Hon Hai’s sales to grow by more than 15 percent quarter-on-quarter, because we are entering the busy season, but our growth is limited by the parts shortage,” he said. “On a year-on-year basis, I expect that fourth-quarter [revenue] would slide by 3 to 15 percent.”
In addition to production being limited by shortages, fourth-quarter sales last year were also unusually high due to COVID-19-related delays pushing sales into the following quarter.
Consumer electronics are expected to slide 15 percent year-on-year, while cloud products should remain flat compared with last year, he said.
However, cloud service-related products would “continue growth,” he said.
As for electric vehicles (EVs), Liu said he expects Hon Hai to develop production facilities in Mexico to accommodate additional production.
In the US, pickup truck models would be in production “as early as the third quarter of 2022,” he said.
In the second half of next year, Hon Hai would begin its Middle East EV project, while it has plans to establish production lines in Europe and India through “lean investments,” Liu said.
“In the first half of 2022, we will start selling the E-bus in Taiwan, and work with e-scooter company Gogoro on battery module and battery swap station production,” he said.
“In Mexico, we will expand our current automotive production facilities,” he said. “In the second half of 2022, our collaboration with Lordstown Motors should yield fruit with its Endurance pickup truck that can start contributing to revenue as soon as the third quarter.”
Hon Hai’s auto component business has so far this year generated revenue of more than NT$10 billion, Liu said, adding that he expects further growth next year.
Hon Hai’s goal to lift gross margin to 10 percent by 2025 remains unchanged, he said.
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