Hon Hai Precision Industry Co., the biggest assembler of iPhones, posted better than expected fourth-quarter profit as a result of the new iPhones and the company's network equipment business.
Net income was NT$62.6 billion ($2 billion) in the three months ended December, Hon Hai said in a filing. The Taiwanese contract manufacturer's gross profit margin rose 0.9 percentage point on the year to 7%, while its operating margin increased 1.68 points to 3.55%.
Hon Hai’s gross margin probably widened sequentially in 4Q as orders for new smartphones helped improve the assembler’s operating efficiency. However, the company is currently dealing with a shrinking demand for iPhones in China, provided that Apple is accounting for about half its sales.
Revenue was NT$1.81 trillion in the quarter. Hon Hai isn’t the only part of Gou’s empire to feel the slowdown. FIH Mobile Ltd., controlled by Hon Hai and an assembler for Android vendors including Huawei and Xiaomi, this month posted a full year loss of $857.1 million.
Apart from being Apple's largest manufacturing partner, Hon Hai is a telecom and networking equipment builder serving Nokia, Ericsson, Cisco and Huawei Technologies.
For the full year, Foxconn's net profit dropped nearly 7% to NT$129.06 billion despite a revenue increase of 12.47%. The gross margin fell 0.17 percentage point to 6.27%.