- Apple Inc’s AAPL iPhone assembler Hon Hai Precision Industry Co Ltd HNHAF, also known as Foxconn Technology Co Ltd FXCOF, joins the likes of Sony Group Corp SONY and Stellantis NV STLA to expect the semiconductor chip crisis to aggravate in Q2 after battling the crisis to report a quarterly profit beat, Bloomberg reports.
- Hon Hai reported $1 billion (NT$28.2 billion) in net income during the March quarter, beating the analyst consensus of NT$24.4 billion. It expects steady upcoming quarter guidance from growth in its consumer electronics and components divisions offset by a slowdown in its server and computer divisions partly due to the crisis.
- Chairman Young Liu reiterated the crisis persistence until Q2 2022 with a business impact of 10%.
- Last month, Liu had talked about the aggravation of the component scarcity since late March, with the lead time for some parts extending to 52 weeks.
- This month, Hon Hai agreed to set up a joint venture with Yageo Corp YAGOY to develop chips at an average selling price below $2.
- This JV will assist Hon Hai’s ongoing business transformation into semi/auto business to drive content value with margin expansion based on BofA analysts. The company’s robust Q1 and April sales reflect share gain in Apple business and the server market, the analysts stated.
- Hon Hai’s quarterly sales rose 44% to NT$1.35 trillion, at par with the analyst consensus from the robust demand for Apple’s new 5G devices and other consumer gadgets.
- Hon Hai estimates limited impact from the component and raw material price surge and aims to reach gross margins of 7% this year.
- Price action: HNHPF closed higher by 3.58% at $7.53 on Friday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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