Top Apple suppliers post solid sales as iPhone concerns persist - Business News

TAIPEI: Apple Inc.’s two largest Asian suppliers unveiled decent jumps in monthly revenue, potentially assuaging investors who fear the worst about iPhone demand.Taiwan Semiconductor Manufacturing Co. and Hon Hai Precision Industry Co. both posted a 5.6 percent rise in November sales, a solid figure given Apple suppliers around the globe have taken turns to cut back on output or revenue outlooks to reflect waning demand for the U.S. company’s most important product.While reflecting just 30 days of business, TSMC’s and Hon Hai’s performance comes in the middle of the year’s busiest quarter and may help balance the narrative that Apple’s latest line-up -- particularly the cheapest iPhone XR -- is falling flat with global consumers.Hon Hai’s November revenue of NT$601.4 billion ($19.5 billion) was a record for the month and takes January-November sales growth to almost 16 percent -- on track for its fastest pace of annual growth in years.TSMC’s sales of NT$98.4 billion, while reflecting a pullback in growth from October, may underscore its rare position of being the sole processor chipmaker for Apple’s most expensive gadgets. TSMC and Hon Hai climbed more than 1 percent in Taipei.From Lumentum Holdings Inc. to Cirrus Logic Inc. and Qorvo Inc., a clutch of Apple’s suppliers have cut or underperformed on their outlooks in recent months, stoking concerns about the iPhone’s prospects as competition intensifies and consumers take longer to upgrade their devices.TSMC, which is grappling also with a stalling crypto-mining market, had itself disappointed investors with a less-than-expected revenue forecast for the December quarter. That lukewarm forecast however may reflect uncertainty around growing U.S.-Chinese trade tensions, analysts said at the time.Apple accounts for close to half of main iPhone-assembler Hon Hai’s revenue and about a fifth of TSMC’s, according to data compiled by Bloomberg.Executives at the chipmaker -- a bellwether for the industry as well as an early barometer of iPhone demand -- have said they expect demand for premium devices to help offset crypto-sector lethargy in the second half.Its high-performance computing, automotive and Internet of Things segments should still expand by double-digits during that time as everyday objects become increasingly connected, executives have said.For Hon Hai however, the more pertinent issue may be its wafer-thin margins -- Apple is expected to apply more pressure on its manufacturing partners should volumes decline.Last week, Morgan Stanley estimated iPhone unit sales will fall 8 percent to 200 million in the current fiscal year, while slashing its target on the American company’s stock to $236 from $253.“Apple’s iPhone weakness is a long-term issue for the Asia supply chain, including Taiwanese suppliers, and we feel that iPhone shipments have peaked,” Fubon Securities’s Arthur Liao said in a Nov. 14 note. - Bloomberg

Source:The Star

December 11, 2018 06:09 UTC


Lower LTAT dividend due to volatile local equities market - Business News

KUALA LUMPUR: The lower dividend from the Armed Forces Fund Board (LTAT) for three consecutive years since 2015 was due to the decline in dividend income received from LTAT's investment in companies and the sale of equities following the volatile domestic equity market, said Defence Minister Mohamad Sabu.He said share trading activities and dividends from investments in companies were among the biggest contributors to LTAT's income, aside from real estate investments, interest from fixed deposits and rental incomes.“For the past three years (2015-2017), LTAT's income from investment dividends and shares trading activities was affected due to the volatility in the local share market,” he said during the minister's question and answer session in the Dewan Rakyat on Tuesday.He was answering a question from Ahmad Amzad Mohamed (PAS-Kuala Terengganu) on the decline in LTAT's net profit and the lower dividend paid to contributors for three consecutive years.Mohamad said LTAT's board of directors and management would continue to identify new types of profitable and viable investments and would review it from time to time to ensure that the investments were secure and would provide the best opportunities.“I have taken some steps to restructure LTAT's administration so that it will become more efficient, and we will ensure that LTAT is in a better position by February next year for the 2018 financial year,” he added.Replying to Ahmad Amzad's supplementary question on the government's willingness to consider the additional option of distributing cash bonuses instead of unit trust shares which has been the practice, Mohamad said the government would continue with the latter, as it provided more long term benefits for LTAT contributors.He said the contributors would benefit from investments and profits from the unit trust shares deposited into their accounts when they retire.

Source:The Star

December 11, 2018 05:15 UTC


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