FIH sees net earnings cut 56% in 1H08
Foxconn International Holdings (FIH), the Hong Kong-listed handset subsidiary of Foxconn Electronics (Hon Hai Precision Industry), has reported that its after-tax profits declined 56% on year to US$142 million in the first half of 2008.
The earnings were lower than market expectations despite a guidance for low earnings issued by the company earlier, pointed out sources from Taiwan's handset industry.
The first-half earnings translate into a net EPS (earnings per share) of US$0.0202, much lower than the US$0.0462 recorded in the same period of 2007, according to company data.
FIH also reported that its gross margin dropped to 6.6% in the first half of the year, down from 9.5% of a year earlier, caused mainly by raw material cost inflation, tightening environmental regulations, and rising labor costs in China.
Despite declining orders from Motorola, FIH revenues grew 4.34% on year to US$4.79 billion in the first half, the company said.
Market sources in Taiwan indicated that orders from Nokia now account for about 50% of FIH's total revenues, followed by those from Motorola with an over 20% share, Sony Ericsson with a 20% share, and Samsung Electronics and LG Electronics each still marginal.
Despite market difficulties, FIH said that it has continued to aggressively expand its design centers in Taipei, Beijing, Nanjing and Seul, aiming to significantly increase engineering resources in software, testing and smartphone design to support its customers.
source
The earnings were lower than market expectations despite a guidance for low earnings issued by the company earlier, pointed out sources from Taiwan's handset industry.
The first-half earnings translate into a net EPS (earnings per share) of US$0.0202, much lower than the US$0.0462 recorded in the same period of 2007, according to company data.
FIH also reported that its gross margin dropped to 6.6% in the first half of the year, down from 9.5% of a year earlier, caused mainly by raw material cost inflation, tightening environmental regulations, and rising labor costs in China.
Despite declining orders from Motorola, FIH revenues grew 4.34% on year to US$4.79 billion in the first half, the company said.
Market sources in Taiwan indicated that orders from Nokia now account for about 50% of FIH's total revenues, followed by those from Motorola with an over 20% share, Sony Ericsson with a 20% share, and Samsung Electronics and LG Electronics each still marginal.
Despite market difficulties, FIH said that it has continued to aggressively expand its design centers in Taipei, Beijing, Nanjing and Seul, aiming to significantly increase engineering resources in software, testing and smartphone design to support its customers.
source
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