Bloomberg News

IPhone Assembler Hon Hai Declines to Four-Month Low

May 15, 2012

Hon Hai Precision Industry Co. (2317), an assembler of Apple Inc. (AAPL:US)’s iPad and iPhone, declined to the lowest level in almost four months in Taipei trading after first-quarter profit margins declined.

The electronics maker fell 1.7 percent to NT$85.40, the lowest close since Jan. 16 on volume about 34 percent higher than the average for the past three months. The benchmark Taiex index (TWSE) added 0.3 percent.

Consolidated gross margin, a key measure of profitability that tracks the ratio of sales less manufacturing costs, dropped to 6.64 percent in the first quarter, from 8.89 percent in the prior period, and missed the 7.76 percent average of nine analysts’ estimates compiled by Bloomberg. Hon Hai on April 28 reported unconsolidated earnings with net income that missed analyst estimates by 31 percent.

Operating margin, which measures the ratio of sales less operating costs, narrowed to 1.52 percent on a consolidated level, from 3.29 percent in the preceding quarter, the Taipei- based company reported yesterday.

Both metrics are the lowest since Hon Hai started posting consolidated quarterly data in 2008.

To contact the reporters on this story: Tim Culpan in Taipei at; Adela Lin in Taipei at

To contact the editor responsible for this story: Michael Tighe at

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