Hon Hai Revenue Beats Estimates on TVs as Apple Orders Weaken
Hon Hai Precision Industry Co. (2317), the world’s largest contract manufacturer of electronics, posted revenue that beat analyst estimates as televisions helped offset weaker orders for Apple Inc. (AAPL) iPhones and iPads.
Second-quarter revenue was NT$897 billion ($30 billion), according to data released by the Taipei-based company today. That was 0.6 percent higher than a year earlier and surpasses the NT$829 billion average of 13 analyst estimates compiled by Bloomberg.
Hon Hai, flagship of Terry Gou’s Foxconn Technology Group, is looking to televisions and more-efficient manufacturing to boost earnings after being forced to share orders for Apple devices with rivals including Pegatron Corp. (4938) Billionaire Gou last month guaranteed to shareholders that profit will climb this year even as revenue dropped 9.9 percent in the first half.
“It’s definitely a surprise with only some areas like TVs being the bright spots because iPhone is still weak,” said Arthur Liao, who has a reduce rating on the stock at Fubon Financial Holding Co. in Taipei. “The question is whether it can be sustained because new Apple devices won’t come until the end of the third quarter.”
More aggressive sales of large-screen TVs, as well as increased orders from Chinese clients including Beijing-based smartphone vendor Xiaomi Corp., may have helped offset the weakness in Apple devices, Fubon’s Liao said.
Hon Hai spokesman Simon Hsing didn’t answer two calls to his mobile phone today.
Sales and earnings at Hon Hai may also be boosted by a turnaround at Hong Kong-listed contract phone manufacturer FIH Mobile Ltd., of which Hon Hai owns about 70 percent. FIH, previously called Foxconn International Holdings, said June 1 that it may return to profit in the six months ending June.
Hon Hai is due to report second-quarter net income next month.
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