Foxconn earnings fall as Chinese regulators greenlight Sharp buyout
Unlike Apple, which had a good, tough fiscal quarter, subcontractor Hon Hai Precision Industry Co. had a pretty bad, tough fiscal quarter.
The company, known publicly as Foxconn, reported a 5 percent drop in total revenue to 922 billion New Taiwan dollars or 29.5 billion USD. That boiled down to 17.7 billion NTD (566 million USD) in net profit, down 31 percent annually and a 26 percent disappointment from analyst expectations.
The correlation between Apple’s demand for Foxconn’s products and services and the company’s health is strong. The biggest iPhone assembler recently laid off some 60,000 workers at its plants and is investing in more automation to cut down on the bottom line.
Foxconn also stated that it has gotten regulatory approval from China’s anti-monopoly officials to buy a two-thirds stake in Japanese displaymaker Sharp. The ¥389 billion ($3.84 billion) deal was considered to be in jeopardy for a short time as approval was being sought, delaying Hon Hai’s plans to close the acquisition in June.
Analysts are split upon whether this year’s iPhone will perform well in sales and benefit Apple and its reliant companies down the line. In the meantime, Foxconn hopes to continue serving Apple with OLED screen provisions via its Sharp investment while potentially making a name for itself with own-brand consumer products.