Experts warn Hon Hai revenue to plunge on lackluster iPhone sales


The China Post news staff

TAIPEI, Taiwan — Despite Hon Hai Precision Industry Co., Ltd.’s continuing efforts at restructuring, Apple remains its primary source of revenue, and experts are warning that as February has fewer working holidays and with the iPhone 7 going through a transition period, revenue could drop drastically in February. The unfavorable factors could see revenue fall below the NT$300 billion to as low as NT$280 billion.

The number of workdays in both January and February were affected by the Lunar New Year break and, due to Hon Hai’s holiday scheduling, the company enjoyed a longer break than other companies did.

Hon Hai, also known as Foxconn, did not open for business until Feb. 5. The company’s revenue slipped to NT$345.331 billion in January due to a combination of factors, including lackluster iPhone 7 sales and the fewer workdays resulting from the Lunar New Year. Compared with December’s NT$449.693 billion, this figure marked a NT$104.308 billion decrease, or a fall of 23.2 percent month on month. However, January’s numbers show a 2.29 increase from the same period last year, when the company reported revenue of NT$337.605 billion. 2015 saw the highest single-month revenue for January, at NT$396.005 billion, making this year’s January revenue the second highest on record.

Notably, all three of Hon Hai’s major products experienced declines in shipments in January. Specifically, consumer electronics products experienced the steepest decline, followed by communication products and finally computer products, which saw a relatively small drop-off in shipments.

The financial experts noted, however, that Hon Hai’s first-quarter revenue typically experiences a fall from the previous year’s fourth quarter, and that things tend to pick up in the second quarter. If Apple is in fact hosting a new product presentation in March, this could present an opportunity for Hon Hai’s revenue to halt its decline and rebound for the second quarter.