Apple assembler Hon Hai Precision profit surges 21%

“Apple Inc.’s major assembler, Hon Hai Precision Industry Co., reported a 21% increase in first-quarter profit, helped by strong iPhone sales and improved production efficiency,” Lorraine Luk reports for The Wall Street Journal.

“The world’s largest contract manufacturer for electronics, commonly known as Foxconn Technology Group, earns almost half of its revenue from Apple,” Luk reports. “The Taiwan-based company has been seeking new avenues of growth, as income from contract manufacturing slows.”

“Hon Hai’s net profit for the three months ended March 31 rose to 19.83 billion new Taiwan dollars ($658 million) from NT$16.35 billion a year earlier. Its revenue rose 9% to NT$883.48 billion from NT$809.01 billion,” Luk reports. “Hon Hai’s fortunes largely hinge on demand from Apple, which sold 43.7 million iPhone units in the three months ended March 29, up 17% from a year earlier… Analysts said they expect Hon Hai’s earnings to grow at a faster rate in the second half of this year, driven by strong demand for next-generation iPhones that will likely come with bigger screens. Apple plans larger displays on a pair of iPhones due for release later this year, people familiar with the matter told The Wall Street Journal in January.”

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