Hon Hai first quarter sales down as iPhone disappoints
TAIPEI (Reuters) - Hon Hai Precision Industry Co Ltd, the main manufacturer of Apple Inc products, posted a 19 percent decline in sales in the first quarter compared with a year earlier, hurt by disappointing demand for the iPhone.
From January to March, Hon Hai's sales totaled T$808.97 billion ($26.96 billion), down from T$988.34 billion in the fourth quarter and T$1 trillion in the first quarter last year.
"A quarterly decline was expected, but not a yearly decline," said KGI Securities analyst Ming-chi Kuo. "This shows that Hon Hai's revenue depends too much on Apple, and iPhone orders corrected more than expected."
Kao expected the Taiwanese contract manufacturer to post flat sales in the second quarter compared with the first, adding that its net profit is also likely to come under pressure in the first half of this year.
Hon Hai draws an estimated 60 to 70 percent of its revenue assembling Apple's iPhones and iPads, and carrying out other work for the California-based company.
Apple missed Wall Street's revenue forecast for the December quarter. Disappointing holiday sales reinforced fears it is losing its dominance in smartphones.
Shares in Hon Hai edged up 0.12 percent on Wednesday, versus a 0.31 rise in broader market
($1 = 30.0010 Taiwan dollars)
(Reporting by Clare Jim; Editing by Daniel Magnowski)