Yahoo Finance

• Revenue: Flat, up by 1% year on year to USD 1.17 billion.

• Gross Profit: Declined 2% year on year to USD 255 million.

• Gross Margin: Contracted by 60 basis points.

• Expense to Sales Ratio: Reduced to 13.5%.

• Operating Income: Increased by 12% year on year.

• Net Income: Grew 24% year on year to USD 68 million.

• Net Margin: Improved by 110 basis points.

• AI Products Sales: Grew significantly, driving a doubling of networking segment revenues.

• Networking Revenue: Increased by 66% during Q3.

• Mobility Segment Revenue: Fell 7% year on year.

• Computing Segment Revenue: Increased by 4% in Q3.

• Full Year Revenue Guidance: High single-digit increase expected.

• Operating Profit Margin Target: Revised to 4.5%.

• Sales to Expense Ratio Target: 15% to 16% for the full year.

• Smartphone Segment: Expected double-digit contraction in the final quarter.

• Networking Segment: Expected high double-digit increase in Q4 2024.

• System Products: Expected single to low double-digit decline in Q4.

• Three-Year Revenue CAGR Target: 20%.

• Gross Profit Margin Target by 2027: Increase from 20% to 22%.

• Operating Margin Target by 2027: 8%.

• Warning! GuruFocus has detected 5 Warning Signs with FITGF.

Release Date: November 13, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• FIT Hon Teng Ltd (FITGF) reported a 12% year-on-year increase in operating income, resulting in a 24% growth in net income.

• The company achieved a 66% increase in networking revenue during Q3, driven by high-speed network product development.

• FIT Hon Teng Ltd (FITGF) maintained its full-year revenue guidance with a high single-digit increase, supported by strong AI infrastructure investment trends.

• The company is on track to generate a 30% contribution from its three plus three strategic industries by the end of 2024.

• FIT Hon Teng Ltd (FITGF) has successfully commercialized and delivered small batch shipments of new AI products, showcasing its capability in next-gen technologies.

Negative Points

• Revenue growth was flat, with only a 1% year-on-year increase, due to weakness in the consumer electronics market.

• Gross profit declined by 2% year-on-year, primarily due to lower-than-expected performance in the automotive market.

• The smartphone segment is expected to contract by double digits in the final quarter due to macroeconomic pressures.

• The company revised its target operating profit margin down by 50 basis points to 4.5% for the year.

• FIT Hon Teng Ltd (FITGF) faces challenges in the automotive sector, impacting shipments and leading to a 7% year-on-year revenue decline in the mobility segment.