Apple supplier Hon Hai Precision Industry reports sales slump as concerns rise

Taiwan’s Hon Hai Precision Industry, which assembles the bulk of Apple’s latest smartphones, saw its December revenues slump by a fifth and full-year sales miss expectations.

The results, published yesterday, came amid growing concerns about slowing shipments of Apple’s latest iPhone 6S models, which Hon Hai assembles.

Analysts said Hon Hai’s results could be an indicator of demand for Apple’s products in the first quarter of this year, but added that period was not normally a peak selling season and past iPhone cycles had followed a similar pattern, where an interim update on a model edition tends to see slower sales.

“The first quarter is an off season, a high base from last year and the global situation is not stable,” said Leon Chu, of Franklin Templeton SinoAm Securities Investment Management in Taipei.

Hon Hai, which goes by the trade name of Foxconn, reported December revenue of T$409.65bn (€11.34bn), down just over 20% compared with both a year ago and November.

For 2015 as a whole, Hon Hai’s revenue totalled T$4.48tn, up 6.4%. Hon Hai said December sales were as expected.

Samsung Electronics said its fourth-quarter operating profit likely rose 15% from a year earlier, missing expectations and fuelling concerns the industry may be in for a year of slack gadget sales.

Taiwan Semiconductor Manufacturing, the world’s largest contract chip maker, said its December sales fell both on the month and on the year.

Reuters