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.