Foxconn reported an 11% increase in profit while revenue fell – Kommersant
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Net profit of the main supplier of components for Apple, Hon Hai Precision Industry (trade name – Foxconn), in the third quarter increased by 11% compared to the same period last year and reached 43.1 billion Taiwan dollars ($1.33 billion), follows from the financial company report (.pdf). The result came as a surprise to analysts, who had predicted that Apple’s Taiwanese supplier’s profits would fall 11% to NT$34.9 billion.
Foxconn achieved profit growth largely due to an increase in operating margin from 2.37% in the second quarter to 2.99% in the third quarter. A year earlier, this figure was 2.78%. At the same time, the company’s revenue decreased by 12% – to 1.5 trillion Taiwan dollars ($47.7 billion). As noted in the report, this is primarily due to a drop in demand for personal computers, as well as for cloud and network products.
The company expects the fourth quarter to be slightly better than previously forecast and for the revenue decline to stop. However, Foxconn does not expect to reach last year’s levels.
Note that this is Foxconn’s first financial report after the Chinese authorities initiated investigation regarding a Taiwanese company. The formal reason for it was suspicions of tax fraud and doubts about the fair use of land.
Read more about the Chinese authorities’ investigation into Foxconn in the material “Second Chinese Warning”.
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