Post by Dave on Mar 30, 2021 1:50:24 GMT -8
Good morning. Today’s pre-market is once again red at -$0.72 at this moment.
Foxconn’s Profit Misses Estimates as Pivot to Cars Accelerates
Foxconn’s Profit Misses Estimates as Pivot to Cars Accelerates
(Bloomberg) -- Hon Hai Precision Industry Co. reported quarterly profit that disappointed investors as the Taiwanese electronics assembly giant accelerated a shift away from its core businesses into making electric vehicles.
The company also known as Foxconn Technology Group said net income for the quarter ended in December declined 3.7% to NT$46 billion ($1.6 billion), slightly below the NT$50.2 billion average of analyst estimates. While the company remains “cautiously optimistic” on the outlook for information and communications technology this year, it’s monitoring component shortages that are expected to persist in 2022, Chairman Young Liu said on a conference call.
“The impact of shortages in the first two months of the quarter have not been too obvious, because our customers are major companies,” Liu said. “Still we are seeing some gradual changes and are monitoring the situation cautiously. Our expectations are that there won’t be a big impact, under 10%.”
Earnings in the previous three months had been driven mainly by new smartphones from Apple Inc. -- its largest customer -- and as demand for home computing equipment remained elevated. But the Taiwanese assembler is casting around for new growth drivers a year into the pandemic and it’s identified electric vehicles as a key emerging industry, joining a rush of technology firms seeking a foothold in auto manufacturing ahead of Apple’s own smart vehicle efforts.
Revenue in the three months ended December rose 15% to NT$2 trillion, reflecting contributions from the iPhone 12 series, whose launch last year had been delayed due to Covid-19, previously disclosed figures showed. Sales of all business lines likely grew in the first quarter, the company said in a presentation earlier this month, when it revealed record monthly sales for February.
What Bloomberg Intelligence Says
Robust demand for high-end iPhone models and enduring work-from-home and remote-learning trends make consensus for 30% 1Q sales growth at Hon Hai appear conservative, we believe. Meanwhile, the delayed release of the iPhone 12 suggests monthly sales may remain in the double digits throughout 1H. The company reported surprisingly strong 84.8% sales growth in February, though vs. a low base in the prior year.
-- Charles Shum and Matthew Kanterman, analysts
The company also known as Foxconn Technology Group said net income for the quarter ended in December declined 3.7% to NT$46 billion ($1.6 billion), slightly below the NT$50.2 billion average of analyst estimates. While the company remains “cautiously optimistic” on the outlook for information and communications technology this year, it’s monitoring component shortages that are expected to persist in 2022, Chairman Young Liu said on a conference call.
“The impact of shortages in the first two months of the quarter have not been too obvious, because our customers are major companies,” Liu said. “Still we are seeing some gradual changes and are monitoring the situation cautiously. Our expectations are that there won’t be a big impact, under 10%.”
Earnings in the previous three months had been driven mainly by new smartphones from Apple Inc. -- its largest customer -- and as demand for home computing equipment remained elevated. But the Taiwanese assembler is casting around for new growth drivers a year into the pandemic and it’s identified electric vehicles as a key emerging industry, joining a rush of technology firms seeking a foothold in auto manufacturing ahead of Apple’s own smart vehicle efforts.
Revenue in the three months ended December rose 15% to NT$2 trillion, reflecting contributions from the iPhone 12 series, whose launch last year had been delayed due to Covid-19, previously disclosed figures showed. Sales of all business lines likely grew in the first quarter, the company said in a presentation earlier this month, when it revealed record monthly sales for February.
What Bloomberg Intelligence Says
Robust demand for high-end iPhone models and enduring work-from-home and remote-learning trends make consensus for 30% 1Q sales growth at Hon Hai appear conservative, we believe. Meanwhile, the delayed release of the iPhone 12 suggests monthly sales may remain in the double digits throughout 1H. The company reported surprisingly strong 84.8% sales growth in February, though vs. a low base in the prior year.
-- Charles Shum and Matthew Kanterman, analysts