Hon Hai sales hit February high

Taipei--Hon Hai Precision Industry Co. (??), the world's largest contract electronics maker, last month posted the highest level of sales it has ever posted for the month of February, despite the reduced number of working days, according to the supplier to Apple Inc.

In a statement, Hon Hai said that its consolidated sales for February stood at NT$289.58 billion (US$9.34 billion), up 3.18 percent from a year earlier, but down 16.14 percent from January.

Market analysts said the year-on-year growth likely resulted from an increase of orders placed by Apple, which is expected to hold an event in March or April to unveil its newest iPad Pro models.

Analysts said the increased orders helped offset the impact of the reduced number of working days in February due to the Lunar New Year holiday.

In February, revenue generated by its consumer electronics and communications devices operations moved higher from a month earlier, but sales coming from computing devices trended lower, according to Hon Hai.

While Hon Hai benefitted from a larger chunk of orders from Apple, analysts said, the Taiwanese manufacturing giant faced slower demand for smartphones and relatively high inventory levels in the China market, which compromised the assembler's overall performance in February.

In the first two months of this year, Hon Hai posted NT$634.91 billion in consolidated sales, up 2.69 percent from a year earlier, the company's statistics showed.

Looking ahead, analysts said, Hon Hai is expected to continue to see orders from Apple growing in March due to the launch of the new iPad Pro series, while the Taiwanese manufacturer will likely receive orders to assemble the 5.5-inch iPhone 7 Plus, which remains in demand.

According to international business wires, Apple will likely unveil the 7.9-inch, 10.5-inch and 12.9-inch iPad Pro series later in the month or in April, and the U.S. consumer electronics giant could start to ship the 10.5-inch model in May.

Apple accounts for more than 40 percent of Hon Hai's total sales since the Taiwanese firm has been one of the most important suppliers to the U.S. brand.

Hon Hai is believed to be the sole assembler of the iPhone 7 Plus, while sharing orders with Pegatron Corp. (??), another Taiwanese contract electronics maker, to roll out the smaller iPhone 7. However, analysts said that investors had better pay attention to whether smartphone demand in China will pick up in March after a slower February to give an additional boost to Hon Hai's sales.

In the first quarter of this year, Hon Hai's consolidated sales are estimated to range between NT$950 billion and NT$960 billion, compared with NT$957.87 billion recorded over the same period of last year, analysts said.

The first quarter revenue is expected to come below the NT$1.4 trillion seen in the fourth quarter, a peak season for Hon Hai, which benefited from a buying spree during the Christmas holiday season.

Source: Focus Taiwan News Channel