Taiwan-based manufacturing giant Hon Hai Precision Industry Co. reported on Thursday that its net profit for the first quarter of 2022 fell 34 percent from a quarter earlier but rose 5 percent year-on-year.
“I suspect the significant sequential fall in Hon Hai’s net profit in the first quarter partly resulted from slow season effects as well as a high comparison base in the fourth quarter,” Mega International Investment Services Corp. analyst Alex Huang said.
“In addition, rising inflation worldwide and China’s COVID-19 lockdowns also dampened demand for consumer electronics, including smartphones and notebook computers, the two major products assembled by Hon Hai,” Huang said.
Before the company started an investor conference on Thursday afternoon, iPhone assembler Hon Hai, also known as Foxconn on the global market, released its first-quarter results.
The result showed that Foxconn’s net profit stood at NT$29.45 billion (US$988 million), down 34 percent from the roughly NT$44.40 billion seen in the fourth quarter of 2021.
However, it was still Hon Hai’s second-best first-quarter performance historically.
On a year-over-year basis, Hon Hai’s first-quarter net profit rose 5 percent from NT$28.16 billion a year earlier.
The first quarter’s earnings per share stood at NT$2.12, compared with NT$3.20 in the fourth quarter and NT$2.03 over the same period of last year.
Compared with the fourth quarter, Hon Hai’s first-quarter gross margin — the difference between revenue and cost of goods sold – moved lower to 6.02 percent from 6.03 percent, while its operating margin — the difference between sales, the cost of goods sold, and operating expenses — also trended lower by 0.18 percentage points to 2.61 percent.
Hon Hai’s first-quarter net margin – the difference between gross profit and total expenses, including interest payments and taxes — fell by 0.26 percentage points from the fourth quarter to 2.09 percent.
On the other hand, the first-quarter gross margin rose 0.22 percentage points from a year earlier, and the operating margin and net margin also rose by 0.56 percentage points and 0.002 percentage points from a year earlier.
In the first quarter, Hon Hai’s consolidated sales stood at NT$1.41 trillion, down 26 percent from a quarter earlier. The sequential fall was deeper than Hon Hai’s previous estimate of a more than 15 percent decline.
Hon Hai had previously anticipated the first-quarter sales would stay little changed from a year earlier but it turned out the year-on-year growth rate hit 4 percent.
According to Hon Hai, sales generated from its consumer smart devices division for the first quarter accounted for 52 percent of the company’s total revenue and its cloud and networking gadgets made up 23 percent.
In addition, its computing division represented 19 percent of Hon Hai’s total sales in the first quarter, while the electronics component division accounted for 6 percent of its total sales.
Source: Focus Taiwan News Channel