Apple supplier Pegatron Q2 results disappoint

Apple supplier Pegatron Q2 results disappoint

Summary: Pegatron's financial results in the second quarter have missed analyst expectations.

SHARE:
TOPICS: Tech Industry, Apple
4

Pegatron, a supplier of components for tech giant Apple, has failed to reach analyst estimates in the second quarter.

logo

The manufacturer posted net income of NT$1.39 billion ($46 million) in the three months ending June 30. Analyst estimates compiled by Bloomberg predicted Pegatron would reach an average of NT$1.72 billion.

Apple accounts for 27 percent of Pegatron's sales, followed by Asustek and Lenovo. However, the manufacturer also supplies components for Microsoft, which has recently slashed the price of the Surface tablet. The Redmond giant has admitted sales of the Surface RT have been dismal, which resulted in a "write-down" of $900 million. 

Pegatron is in competition with larger rival Foxconn -- also known as Hon Hai -- for manufacturing contracts. While Pegatron supplies components for some iPhone models and the iPad Mini, Foxconn assembles larger models. Some analysts believe that while Pegatron is a smaller company, as it accepts contracts with less of a profit margin, the manufacturer has the potential to secure more work from the iPad and iPhone maker in the long run.

Both Foxconn and Pegatron have been the target of accusations by worker advocate group China Labor Watch, which has alleged a series of factories hire underage workers, withheld worker pay and provided poor living conditions. Apple, which has established a supplier code of conduct designed to protect workers, said that Pegatron employees work an average of 46 hours per week, and these allegations are under review. Foxconn CEO Jason Cheng promised that the claims will be investigated in full.

Topics: Tech Industry, Apple

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

4 comments
Log in or register to join the discussion
  • Biased headline

    If Pegatron is a supplier for all these other companies why is Apple mentioned in the headline? And if their results didn't disappoint would the headline have been the same?
    Rogifan
    • Maybe...But...

      Omitted from the article is that '...non PC revenue is expected to increase 40 - 50% in the next quarter due to orders from Apple and Sony' and the reduction in earnings was mainly down to failure of its PC and Windows 8 business.
      frogspaw
    • They have to put Apple in the headline...

      just to generate the clicks. If they'd used ASUS instead of Apple, do you really think anyone would have cared. The news media has the worst case of Apple name-dropping I have ever seen when it comes to problems, accidents, suicides, delays, disappointments, etc. Anything that's unfavorable, they prefer to use Apple because Apple to them is like a calling card to stir up outrage.
      Steffen Jobbs
  • pegatron

    Pegatron made the motherboards in 2 of my HP PC's probably providing the workers equally poor working conditions with the workers on the iPhone assy lines .
    or at least as bsd the Foxconn working conditions .
    I'm not a fanboy but I don't see the media including ZDnet,cnet or any media other beating up
    HP,Asus (Asus is Pegatron parent co btw) , Sony ,Microsoft,Nintendo and many other brands that use these companies to manufacture and or assemble many other things including and besides TV sets iPhones,Android phones and PC's
    preferred user