Hon Hai Sales Drop Most in 13 Years as iPhones, Electronics Slow
Hon Hai Precision Industry Co. (2317), the world’s largest contract manufacturer of electronics, posted its biggest revenue decline in at least 13 years, pointing to slower sales of iPhones, iPads and computers.
First-quarter revenue fell 19.2 percent from a year earlier to NT$809 billion ($27 billion), the Taipei-based company said in a statement today. That’s less than the NT$895 billion average of 10 analyst estimates compiled by Bloomberg and the largest decline since at least 2000.
Sales missed expectations by 9.6 percent, the most in more than four years and indicate a slowdown in orders from Apple Inc. (AAPL), Hon Hai’s largest customer. Falling computer shipments to Hewlett-Packard Co. (HPQ) and weaker sales of games machines for Sony Corp. (6758), Microsoft Corp. (MSFT) and Nintendo Co. also may have contributed to the shortfall at Hon Hai, the Taipei-listed flagship of Terry Gou’s Foxconn Technology Group.
“These numbers are an indication that iPhone and iPad sales are not doing as well as expected,” said Vincent Chen, an analyst at Yuanta Financial Holding Co. in Taipei who has a buy recommendation on Hon Hai shares. “HP’s desktop shipments are falling and games consoles are weakening, accounting for further declines at Hon Hai.”
Simon Hsing, spokesman for Taipei-based Hon Hai, declined to comment on reasons for the decline. Carolyn Wu, a Beijing- based spokeswoman for Cupertino, California-based Apple didn’t answer two calls to her mobile phone after office hours.
Pegatron Corp. (4938), the Taipei-based maker of iPad Mini, posted 29 percent revenue growth for the quarter, it said today. That data indicates sales of iPad Mini may still be strong, Yuanta’s Chen said.
Apple, which lost its title as the world’s largest smartphone maker to Samsung Electronics Co. last year, probably posted revenue growth of 9 percent in the quarter ended March 31, the slowest since the September quarter of 2009, according to analyst estimates compiled by Bloomberg.
Quanta Computer Inc. (2382), the world’s largest customer manufacturer of laptops for clients including Apple and HP, posted a 17 percent drop in first-quarter sales, missing analyst estimates, according to a company statement today and Bloomberg data.
“Consumers and businesses are continuing to delay purchases of computers, adding to the problem the sector faces in losing out to tablets and smartphones,” said Jitendra Waral, a Hong Kong-based technology analyst at Bloomberg Industries. Global notebook computer sales will probably have little growth in 2013 with the first half weakest, Waral said, citing IDC forecasts.
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