Hon Hai Precision Industry Co (鴻海精密) yesterday posted 20 percent quarterly growth in revenue for last quarter, slightly beating its expectations, but the iPhone maker expected revenue to drift into negative territory this quarter due to seasonal weakness.
“Overall operations in the first quarter of 2024 are gradually entering the traditional off-peak season, and seasonal performance is expected to be similar to that of the past three years,” Hon Hai said in a statement yesterday.
Over the past three years, weakness in off-season demand for electronics has driven Hon Hai’s revenue down by between 26 percent and 33 percent in the first three months of the year.
Photo: CNA
On an annual basis the “outlook for the first quarter of this year is expected to decrease,” Hon Hai said, attributing the decrease to a higher comparison base as
factories resumed normal operations following the COVID-19 pandemic in the first quarter of last year.
Hon Hai, based in New Taipei City’s Tucheng District (土城), in November gave a conservative forecast for this year, saying that unfavorable economic conditions and geopolitical tensions would easily offset the meager growth of 5 percent in global electronics demand.
Strong seasonal demand last quarter helped translate market demand into revenue growth of 20 percent sequentially to NT$1.85 trillion (US$59.63 billion), Hon Hai said. On an annual basis, revenue last quarter contracted 5.4 percent, better than market estimates, it said.
Cloud and networking products, servers primarily, unexpectedly registered a “significant” increase in revenue due to a strong rebound in server demand last quarter, Hon Hai said in a statement yesterday.
The company gave a “flattish” outlook for this product category in November as demand was only stabilizing as a result of
improving inventory of
general-purpose servers.
The components and other products segment was the only category of the company’s four major product categories to register revenue growth both quarterly and annually during the final quarter of last year.
The growth was driven by the increasing adoption of components such as those used in vehicles and higher prices, Hon Hai told investors in November.
Last year as a whole, Hon Hai saw revenue dip 6.98 percent year-on-year to NT$6.2 trillion, matching the company’s expectations in November, but slightly better than the market estimate, the company said.
Last year’s revenue was the second-highest in the company’s history, only bettered by the NT$6.62 trillion the company made in 2022.
Electronics companies had a tough year last year as consumers tightened purse strings amid high interest rates, rocketing inflation and geopolitical conflicts.
Hon Hai was no exception, facing sagging consumer demand for smartphones, cloud-enabled devices and PCs.
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