Hon Hai Q4 sales grow 20% from Q3; but 2023 revenue down 7% yoy

Taipei, Jan. 5 (CNA) Hon Hai Precision Industry Co. reported Friday that its sales for the fourth quarter of last year rose 20 percent from a quarter earlier due to rising demand for smart consumer electronics, electronics components, and cloud and networking devices during a typically peak season.

However, for the entire 2023, the consolidated sales of the world's largest contract electronics maker and iPhone assembler moved lower by 6.98 percent from a year earlier to NT$6.16 trillion (US$198 billion).

Analysts contributed the decline to global demand weakness amid high inflation and aggressive rate hikes by the major central banks in the world.

The 2023 revenue was the second highest level for Hon Hai, globally known as Foxconn, after it earned NT$6.62 trillion in 2022, the company said.

During the October-December period, Hon Hai posted NT$1.85 trillion in consolidated sales, up from NT$1.54 billion a quarter earlier, while the Q4 revenue fell 5.4 percent from a year earlier.

Hon Hai said its smart consumer electronics division reported a strong sequential increase in sales in the fourth quarter due to new product pull-in demand and a move by its customers to rebuild inventories for the holiday season.

Analysts said a year-end buying spree helped Hon Hai secure more revenue in the fourth quarter from smart consumer electronics products, including the latest iPhone 15 series unveiled by Apple Inc. in September.

Hon Hai is said to be the sole assembler of Apple's flagship models iPhone 15 Pro and iPhone 15 Pro Max, which command a higher profit margin.

However, Hon Hai's computing product division saw revenue in the fourth quarter last year little changed from a quarter earlier, the company said.

In December alone, Hon Hai's consolidated sales stood at NT$460.13 billion, down 29.21 percent from a month earlier and 26.89 percent from a year earlier.

Hon Hai said the December revenue beat the company's earlier forecast as its cloud and networking division and electronics component operations reported "significant" growth from a month earlier.

Looking ahead, Hon Hai said as its Zhengzhou compound in China's Henan province, which rolls out iPhones, resumed its production in the first quarter of 2023 after a shutdown amid COVID-19, sales for the current three-month period could fall from a year earlier due to a relatively high comparison base

Meanwhile, smartphone camera lens maker Large Precision Co., another Apple supplier, said its consolidated sales for December fell 30 percent from a month earlier to NT$4.78 billion and the fall had been anticipated.

On a year-on-year basis, however, December sales rose 19 percent, the company said.

In December, 20 mega-pixel lenses and higher -- which have a higher profit margin -- accounted for 20-30 percent of Largan's total sales, with 10-20 mega-pixel lenses making up 50-60 percent, 8 mega-pixel lenses representing up to 10 percent, and products other than camera lenses making up the remaining 10-20 percent, the company said.

In 2023, Largan's consolidated sales stood at NT$48.84 billion, up 2 percent from a year earlier, the company added.

Largan, which is scheduled to hold an investor conference on Jan. 11 to release the fourth quarter results and give guidance for the first quarter, said it is expected to continue to report a month-on-month fall in January due to slow season effects.