Apple Helps Foxconn Post Record Profits
Hon Hai Precision Industry Co, also known as Foxconn, has posted record quarterly profit thanks to increased efficiency and an expanding Apple product line, reports Bloomberg.
Fourth quarter net income increased by 5.6% to about $1.2 billion (NT$37 billion), above the average predicted by analysts.
Hon Hai solved production problems that had crimped output of the iPhone 5 in the prior quarter, helping it raise revenue and margins. The Taipei-listed flagship of Terry Gou’s Foxconn Technology Group may face a drop in sales and profit this quarter as demand for the iPhone wanes amid growing competition from Samsung Electronics Co.
“As they scaled up production of the iPhone and solved production bottlenecks, Hon Hai’s profit margins improved and they may have had some room to push Apple for better pricing,” said Vincent Chen of Yuanta Financial Holding Co. in Taipei. “Shipments of iPhone started to drop significantly in the first quarter and there may be no new product to boost sales a lot in the second quarter either.”
Net income for 2012 increased 16% to $3.18 billion (NT$94.8 billion) and revenue increased 13% to $130 billion (NT$3.9 trillion).