Hon Hai Expects Better Operations in Second-half

Impacted by product changes at its main customer, Apple Inc., Hon Hai Precision Industry Co., Ltd. posted non-combined revenue in June of NT$ 236.83 billion (US$ 7.89 billion), down 1.76% from May but up 3.69% MoM, according to statistics released by Hon Hai, Taiwan's largest electronics manufacturing service provider, with revenues of NT$ 729.654 billion (US$ 24.32 billion) in the second quarter, 7.63% less than the first quarter but still within market expectations to be the firm's third- highest quarterly revenue.

Institutional investors indicated that Hon Hai's second-quarter shipments of personal computers (PC) and consumer electronics were lower than expected, with stable growth in shipments of network communication products. The main reasons for Hon Hai's declining revenues in the second quarter include lower sales of New iPads than expected, with the upcoming iPhone 5 launch in the third quarter also impacting sales of iPhone 4 and iPhone 4S. Apple will also launch new products as iPad mini, iPhone 5 and iTV in the second half, which will help Hon Hai to generate better sales than in the first half.

The iPhone 5 will be on sale ahead of schedule, which Hon Hai will start shipping in July for being the exclusive contractor for the item, as well as delivering the iPad mini by October, according to wire news.

Institutional investors added that Hon Hai's investment in Sharp of Japan (a flat panel display plant) has raised capacity utilization, with iTV to be marketed in the fourth quarter and jumbo sized LCD TVs to be on sale before the end of September, helping to generate revenue in the second half.

source & copyright: CENS