TAIPEI: Shares of Taiwan’s Hon Hai Precision Industry jumped on Wednesday after the main manufacturer of Apple’s products posted a sharp rise in quarterly net profit, boosted by new gadget launches by the California giant.
But strong early share gains were later tempered by investor caution over Apple’s long-term growth prospects, analysts said.
Hon Hai, the assembler of both iPhone 5 and iPad mini launched in September and October, respectively, started mass production for the products in late August.
The company reported nine-month profit late on Tuesday of T$57.8 billion, 24 per cent higher than the year-ago period.
Net profit in July-September was T$30.3 billion ($1.04 billion), according to Reuters and analyst calculations, up 58 per cent from a year earlier. Profits in the quarter were 140 per cent higher than the previous three months.
Hon Hai said in a brief statement that it had achieved a notable market share gain “in the midst of the European led global economic uncertainty and potential industry shrinkage,” adding, however, that it could not clearly predict future trends.
It did not give further details in a statement late on Tuesday to the Taiwan stock exchange or in a subsequent statement on Wednesday.
Shares of Hon Hai were up 1. 14 per cent, outperforming a 0.5 6 per cent fall in the broader market, but easing from a 3.4 per cent gain at the opening.
“The rise we saw this morning was not much given the strong Q3 figures” in fact many foreign investors have been selling Hon Hai shares recently,” said Vincent Chen, analyst at Yuanta Securities.
“Many foreign investors who bought Hon Hai were buying into Apple’s future, but they’re now showing concerns over Apple’s growth.”
Last week, Apple Inc delivered a second straight quarter of disappointing results and iPad sales fell well short of Wall Street’s targets, but investors said they would focus on the year-end holiday quarter.
Analysts have generally expected Hon Hai’s shipments to Apple to increase in the fourth quarter as yield rates of iPhone 5 and iPad m inis i mproved from the initial production period.
In a trading note, Barclays Capital analyst Kirk Yang said he expected fourth-quarter consolidated sales to grow by 14 per cent from a year ago due to strong Apple product shipments.