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Hon Hai sales hit new January high

2019/02/16 14:28:14

Taipei, Feb. 16 (CNA) Taiwan-based Hon Hai Precision Industry Co., the world's largest contract electronics maker and iPhone assembler, posted the highest sales for January, which market analysts said were due to stable shipments of non-smartphone devices, which helped the company offset the impact from weaker-than-expected iPhone sales.

In a statement, Hon Hai said its consolidated sales for January totaled NT$400.61 billion (US$12.99 billion), up 3.37 percent from a year earlier, but the January figure was down 33.14 percent from a month earlier due to slow season effects.

Hon Hai said its computing device division outperformed its communications and consumer electronics divisions in January, compared with December and the same period of last year.

Echoing Hon Hai, analysts said the manufacturing giant, also known as Foxconn in the global market, benefited from steady sales in notebook computers, desk-top computers as well as servers in January, while shipments of the iPhone XR, the iPhone XS and the iPhone XS Max, the latest iPhone models unveiled in September, remained slow.

Analysts said slow season effects are expected to continue to dominate Hon Hai's performance.

But analysts added whether the company will have a rebound in sales in the second quarter will depend on the global economy which has been haunted by the on-going trade disputes between the United States and China and slowing manufacturing activity in major economies.

Despite falling demand for iPhones, Hon Hai still reported NT$1.81 trillion in consolidated sales for the fourth quarter, the highest quarter in the company's history, due to increased orders for other computing gadgets.

For 2018, Hon Hai's consolidated sales also hit a new high of NT$5.296 trillion.

Analysts said after a capital reduction of 20 percent in 2018, Hon Hai is expected to post about NT$8 in earnings per share for the year, little changed from the NT$8.01 posted in 2017.

Terry Gou (郭台銘), chairman of Hon Hai, said before the Lunar New Year holiday ended on Sunday that the group is determined to make more efforts in developing artificial intelligence (AI) and integrating AI with cloud technology, to help transform the company from being a pure contract manufacturer.

In a separate statement filing to the Taiwan Stock Exchange, Hon Hai said Gou raised his stake in Hon Hai to 9.59 percent in January from 9.57 percent seen in December by buying 3 million shares of his company.

In the past three months, Gou bought a total of 33.02 million Hon Hai shares from the open market. Analysts believe a move by a company's executives to raise their holdings in the company showed they have faith in the firm's outlook and is expected to boost investors' confidence in the company.

On Friday, however, shares of Hon Hai fell 1.54 percent to close at NT$70.30 due to profit taking on the Taiwan Stock Exchange.

(By Chung Jung-feng and Frances Huang)