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Hon Hai reports sharp annual rise in Q2 net profit

Hon Hai reports sharp annual rise in Q2 net profit

Taipei, Aug. 14 (CNA) Hon Hai Precision Industry Co. (??), the world's largest contract electronics maker, on Thursday reported a net profit increase of more than 27 percent year-on-year for the second quarter of year, which market analysts attributed mainly to foreign exchange gains. In a statement Thursday, Hon Hai said that it posted NT$25.69 billion (US$800 million) in net profit for the April-July period, up 27.26 percent from a year earlier and the highest ever second-quarter net profit for the company. Hon Hai's second-quarter earnings per share stood at NT$1.65, compared with NT$1.3 in the same period of last year. Its consolidated sales for the April-July period were NT$972.71 billion, up 10.64 percent year-on-year. Analysts estimated that Hon Hai, which assembles iPhones and iPads for Apple Inc., raked in about NT$2.18 billion in foreign exchange gains in the second quarter, which boosted its bottom line, and it accumulated some NT$3.9 billion in interest income. However, compared with the first quarter, the company's net profit fell 15.45 percent in the wake of the industry's slow season, its consolidated sales dropped 4.1 percent, and its EPS fell below NT$2.05. Its gross margin rose to 7.2 percent from 7.14 percent in the first quarter, while its operating margin fell to 3.4 percent from the first quarter's 3.81 percent on higher research and development costs. In the first half of the year, Hon Hai posted NT$56.07 billion in net profit, up 41.14 percent from a year earlier, and an EPS of NT$3.61, compared with NT$2.56 a year earlier. Analysts said that Hon Hai is expected to climb out of the first-half slow season as Apple prepares to launch the next generation of the iPhones, most likely in September. Hon Hai's sales growth is forecast to accelerate in the third quarter and peak in the fourth quarter on the back of an increase in orders from Apple. In a recent research note, KGI Securities said Hon Hai is expected to serve as the sole assembler of the new 5.5-inch iPhone model and to secure about 60 percent of the orders to manufacture the new 4.7-inch iPhone model. (By Jalen Chung and Frances Huang)


Updated : 2021-09-17 20:23 GMT+08:00