Hon Hai Precision Industry Co (鴻海精密), which assembles Apple Inc’s iPads and iPhones as well as electronic gadgets for other brands, yesterday said its revenue contracted about 11 percent sequentially to NT$1.3 trillion (US$41.7 billion) last quarter, attributing it to faltering demand for smart consumer electronics, smartphones primarily.
The demand for two categories — computer products and cloud and networking products — was higher than expected, which was boosted by new PC product launches by customers, the company said.
Revenue from the two categories registered a quarterly growth last quarter, exceeding Hon Hai’s previous expectation of a flat performance, the company said.
Photo: Fang Wei-chieh, Taipei Times
Hon Hai expected PC customers’ inventory digestion efforts to approach an end in the second quarter, while server customers from enterprises might take until the third quarter, Hon Hai chairman Young Liu (劉揚偉) told investors in May.
Revenue from electronic components such as camera lenses showed robust growth quarter-on-quarter as the company expected, Hon Hai said.
Market share gains also helped drive the growth, the company said.
On an annual basis, revenue sank 13.75 percent last quarter compared with NT$1.51 trillion in last year’s second quarter. During the first six months of this year, revenue dropped 5.25 percent year-over-year to NT$2.77 trillion compared with NT$2.92 trillion during the corresponding period last year.
Businesses would gradually ramp up this quarter as the electronics industry’s peak season is under way, Hon Hai said.
Revenue this quarter is expected to pick up at a slightly faster pace, compared with the quarterly growth rate of 16 percent registered in the third quarter last year and 4 percent in the third quarter in 2021, Hon Hai said.
The revenue growth rate is expected to be approximately on par with the pre-pandemic period, Hon Hai said.
For the full year this year, revenue would be little changed from last year’s NT$6.63 trillion, Liu said in May.
The conservative estimate came as growing macroeconomic uncertainty blurred order visibility, Liu said at the time.
This year as a whole, PC products and optoelectronic components would be the major growing areas, he said.
However, it would be a big challenge to retain its gross margin at a similar level with last year at 6.04 percent, given volatility in foreign exchange rates and extra operating spending due to pandemic measures, Liu said.
The company maintained its 10 percent gross margin target for 2025, Liu said.
Hon Hai is to release detailed financial figures and provide updates about its business outlook in an investors’ conference on Aug. 14.
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