ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintSite TitleTitle ChevronIcon Twitter
Asia300

Foxconn's operating profit up on automation, but bottom line drops

 (placeholder image)
Foxconn is benefitting from increased automation in its factories.   © Reuters

TAIPEI -- Key iPhone assembler Hon Hai Precision Industry, also known as Foxconn Technology Group, benefited from cost control on growing use of automation in its factories, but its bottom line dropped due to smaller gains in non-operating income.

In the quarter to September, Foxconn reported sales of 1.07 trillion New Taiwan dollars ($33.57 billion), up 0.91% on the year. Operating profit rose 10.33% year-over-year to NT$42.1 billion, but net profit fell 8.51% to NT$34.63 billion.

Foxconn has been working aggressively to expand automation on its Chinese campuses, including the iPhone assembly facility in the central Chinese city of Zhengzhou.

Foxconn Chairman Terry Gou told the Nikkei Asian Review on Nov. 5 that Foxconn has now deployed 60,000 robots on its production lines.

"We plan to increase that number by 20% to 30% every year," Gou said. "We've already had some lights-off facilities [due to large-scale deployment of robots] and we will have more of them in the future."

Despite a double-digit gain in operating profit, the bottom line suffered from factors not directly related to the company's main line of business.

The company did not disclose details of the non-operating income for the reporting period in question and queries from the Nikkei Asian Review had not been answered at the time of filing.

"Foxconn's non-operating income was around NT$10 billion in the July-September period last year and that was a pretty high base. Even though Foxconn's non-operating income was still in the positive territory in the past quarter, it still cannot compare to the same period last year," said Vincent Chen, an analyst at Yuanta Securities Investment Consulting.

Chen said that Foxconn recognized only about NT$1 billion of losses from the embattled Sharp Corporation, the Japanese subsidiary it acquired earlier this year, in its non-operating income in the third quarter.

On Thursday, Foxconn reported revenue of NT$471.93 billion for October, down 6.17% year-over-year. The numbers raise questions about how strong demand will be for client Apple's new iPhone 7 range over the coming holiday season.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends April 30th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media