Pegatron shares up on iPhone expectations
TAIPEI — Pegatron, a Taiwanese contract manufacturer, turned in a stronger-than-expected profit in the second quarter and says its smartphone business will likely see healthy growth in the third quarter on robust demand for new iPhone models.
Pegatron’s net profit for the second quarter, which ended in June, more than doubled on the year to 4.6 billion New Taiwan dollars ($147.1 million), on revenue of NT$217.9 billion, up 2.6%. That worked out to a profit of NT$1.82 per share, exceeding the market consensus of NT$1.27 per share.
However, revenue was down 20% from the first quarter, and sales of communications products, including smartphones, tumbled 32%. Chief Financial Officer Charles Lin attributed the declines to product transitions on the clients’ side.
Pegatron CEO Jason Cheng said he expects demand for smartphones to increase in the second half.
“We expect noncomputing products to grow 20-30% sequentially in the third quarter, and communications products are expected to grow strongly,” Cheng said.
Pegatron shares rose 4% Monday to close at NT$86.5, shortly before the company announced its results for the April-June period.
Arthur Liao, an analyst at Fubon Securities, said in an Aug. 5 note that Pegatron has secured more iPhone 6S orders from Apple and now handles half of all assembly for the phone.