Bloomberg: Hon Hai Posts Record Profit
According to a report from Bloomberg, Hon Hai Precision Industry Co., a major manufacturer of Apple’s products, has seen fourth quarter net profit increase by 5.6 percent.
Hon Hai Precision Industry Co., the world’s largest contract manufacturer of electronics, posted record quarterly profit after it boosted production efficiency and output of Apple Inc. (AAPL) iPhones and iPads,” Tim Culpan writes for Bloomberg. “Fourth-quarter net income climbed 5.6 percent to NT$37 billion ($1.2 billion), according to data compiled by Bloomberg based on full-year results published today.”
According to the report, this figure is higher than the NT$35.9 billion average of 14 analyst estimates compiled by Bloomberg. However, the company is expected to see a fall in revenue in this quarter.
“Hon Hai solved production problems that had crimped output of the iPhone 5 in the prior quarter, helping it raise revenue and margins,” said Tim Culpan. “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 (via Bloomberg). “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.”
