May 9, 2017 8:55 pm JST

After weak Q1, iPhone assembler Pegatron sees muted Q2

But new iPhone range due later this year could change its fortunes

By DEBBY WU, Nikkei staff writer

Apple's iPhone accounts for more than 50% of Pegatron's sales.

TAIPEI -- Key iPhone assembler Pegatron on Tuesday reported a drop in both revenue and profit in the January-March period and said it expected another subdued quarter ahead of the release of the new iPhone range in the second half of this year.

Fubon Securities analyst Arthur Liao said that while Pegatron's revenue in the first half would register a year-on-year decline due to weak sales of its consumer electronics and notebook products, the July-December period would have a greater impact on the company's full-year results.

"Pegatron will virtually monopolize orders for the upcoming 4.7-inch iPhones so its revenue for all of 2017 will at least stay flat from last year," Liao said.

Apple accounts for more than 50% of Pegatron's sales. In 2016, Pegatron's sales in the second half made about 58% of the full-year revenue.

In the January-March period, net income fell 5.5% on the year to 3.88 billion New Taiwan dollars ($128.27 million), partly on forex losses of NT$1.28 billion, on revenue of NT$238.99 billion, also down 6.8% year-on-year.

Shares in Pegatron closed flat at NT$89.7 ahead of the earnings announcement. The stock has advanced 16.7% since the beginning of the year, compared to the 23.5% gain made by its bigger rival Hon Hai Precision Industry, otherwise known as Foxconn Technology Group.

Apple Chief Executive Tim Cook said during an earnings announcement on May 2 that his company was seeing a "pause" in demand for the iPhone 7 range due to widespread speculation around the upcoming iPhone offerings later this year.

Asia300

Pegatron Corp.

Taiwan

Market(Ticker): TAI(4938)
Sector:
Industry:
Electronic Technology
Computer Processing Hardware
Market cap(USD): 8,207.5M
Shares: 2,574.73M
Asia300

Hon Hai Precision Industry Co., Ltd.

Taiwan

Market(Ticker): TAI(2317)
Sector:
Industry:
Electronic Technology
Computer Peripherals
Market cap(USD): 64,131.9M
Shares: 17,328.7M

Get Insights on Asia In Your Inbox

To read the full story, Subscribe or Log in

Get your first month for $0.99

Redeemable only through the Subscribe button below

Once subscribed, you can…

  • Read all stories with unlimited access (5 articles per month without subscription)
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

We could not renew your subscription.
You need to update your payment information.

To read the full story, Subscribe or Log in

Once subscribed, you can…

  • Read all stories with unlimited access (5 articles per month without subscription)
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

We could not renew your subscription.
You need to update your payment information.