Two cursory sales announcements Monday in Taipei could spell a warning shot for Apple Inc. and its brethren. Or they may mean nothing.
Hon Hai Precision Industry Co., the listed flagship of iPhone assembler Foxconn Technology Group, posted the lowest quarterly revenue in three years. Sales at Taiwan Semiconductor Manufacturing Co., which makes the core chip for Apple's smartphones, missed estimates while squeaking in at the bottom end of guidance. Both numbers were compiled by Bloomberg Gadfly from monthly sales statements.
Tim Cook himself back in May blamed more frequent and earlier reports about future iPhone models for what he called a "pause" in purchases. If he's right, then dismal sales at Hon Hai should only be a temporary problem. The company, which gets half its sales from Apple, posted revenue for the three months to June 30 of NT$917 billion ($30 billion), missing estimates for NT$931 billion.
But even if that were caused by delayed purchases of iPhones, it wouldn't paper over the fact that the world's largest assembler of electronic devices just recorded its fifth revenue decline in the past seven quarters.
TSMC looks a bit more solid. Revenue of NT$213.9 billion is within the NT$213 billion to NT$216 billion range given by the company back in April, but did miss the NT$215 billion that analysts expected.
It's possible some blame can be attributed to a Taiwan dollar rate during the quarter that was a little stronger than the company had modeled.
This lack of a clear take on the numbers will provide evidence enough for both TSMC bulls and bears. Recent weakness in the company's Taiwan-listed shares and U.S. depository receipts however indicates that the naysayers may have been ahead of the curve.
TSMC will announce earnings on Thursday in Taipei, at which time we'll get a better picture of the bottom line and guidance for the coming iPhone quarter.
But don't look to Hon Hai for any hints: It won't report until mid-August and never provides an explanation or outlook. For that, you'll just have to keep relying on the media's frequent product reports to which Tim Cook is most adverse.
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