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Hon Hai: Normal Seasonality Neutral To Positive For Apple

|Includes: Apple Inc. (AAPL)

Hon Hai (2317.TW), the world's largest contract manufacturer and Apple's (NASDAQ:AAPL) biggest supplier, has reported July consolidated revenues of NT$248.69B (US$8.30B). The +5.01% M/M increase is essentially in line with a 10-year average of +5.80% (σ=9.89%).

Hon Hai receives >40% of its revenues from AAPL, and accounts for a similarly large percentage of AAPL's COGS. As such, it is an important indicator of AAPL's revenue trends, as it manufactures the bulk of its iPhones and iPads, as well as Macs.

Cirrus Logic (NASDAQ:CRUS) recently guided calendar Q3 revenues well above Street expectations, which suggested a new AAPL product (such as the much-rumored iPad mini) on the horizon, as CRUS provides the audio chip for all AAPL hardware.

Hon Hai's results do not yet indicate a significant uptick in AAPL's business, but the normal seasonal strength in light of other deteriorating markets may suggest some better-than-seasonal AAPL strength.

Typical seasonality for Hon Hai's August quarter would be +3.92%, followed by September at +17.71%; we'll continue to monitor the supply chain data as it becomes available.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.