(Bloomberg) -- Key iPhone assembler Hon Hai Precision Industry Co.’s third-quarter profit beat estimates, underscoring how the Taiwanese manufacturer is extending its post-Covid-19 recovery.
The company, also known as Foxconn Technology Group, said net income for the three months ended in September was NT$30.9 billion ($1.1 billion), against average analyst estimates of NT$28.7 billion. Sales for the period totaled NT$1.29 trillion, down about 6.8% from a year earlier after Apple Inc. pushed back the launch of its flagship handsets this year, according to Bloomberg News calculations based on previously released monthly sales numbers.
Apple -- which accounts for roughly half the Taiwanese company’s revenue -- typically introduces new mobile devices in September each year but the iPhone 12 and iPhone 12 Pro went on sale in late October, while two other models have only become available this month. The handset’s launch will likely boost Hon Hai’s results for the October-December quarter, with Apple’s Chief Executive Tim Cook saying in late October the response to the 5G iPhone lineup and other new devices has been “tremendously positive.”
Month-on-month sales growth in September was slower than the year-earlier period, “showing revenue impact from iPhone launch,” Bloomberg Intelligence analysts Matthew Kanterman and Simon Chan wrote in a note. “Strength in Covid-driven demand for computing and enterprise cloud products drove Hon Hai’s sequential sales growth in 3Q faster than consensus expectations, based on its monthly disclosures. Coupled with new iPhone’s launch in 4Q, Hon Hai is poised for sales recovery in 2H.”
Hon Hai shares have shed roughly 10% this year. The stock took a beating early on and the manufacturer struggled through much of February, when the Covid-19 outbreak disrupted transportation and logistics and delayed the return of the hundreds of thousands of workers it needed to assemble iPhones and other electronics in China. The China-based tech supply chain has since bounced back after Beijing got the virus under control.
©2020 Bloomberg L.P.
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