Assembler of iPhone says profit sank 15% amid slower growth in device's shipments
By Yoko Kubota
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (May 15, 2018).
BEIJING -- Foxconn Technology Group posted a worse-than-expected 15% drop in first-quarter net profit after Apple Inc., its biggest customer, reported modest growth in iPhone shipments.
Taiwan-based Foxconn said Monday that profit for its January through March period was NT$24.1 billion ($809 million), compared with the NT$25.4 billion average estimate of analysts polled by S&P Capital IQ. Its net profit in the year-earlier quarter was $28.2 billion.
Revenue for the quarter rose 5.5% to NT$1.0 trillion from the previous year's NT$975.0 billion.
Foxconn, known formally as Hon Hai Precision Industry Co., is the world's largest contract electronics maker and assembles Apple's iPhone X among other products. Its results, at times, offer a glimpse into Apple's iPhone business.
Last year, Foxconn relied on Apple for about 54% of its revenue, according to Arthur Liao, an analyst at Fubon Research. Foxconn chairman Terry Gou has been working to expand the company's business beyond contract manufacturing and into consumer brands of its own.
Apple doesn't offer a breakdown of shipments by iPhone models. But recently, the growth pace of the number of iPhones Apple ships has slowed down. In the quarter that ended in March, Apple posted a modest 3% increase in the number of iPhones shipped.
Yet Apple's revenue from the iPhone rose 14% to $38 billion during that period, helped by higher average prices, driven by the $1,000 iPhone X launched last year.
Foxconn on Friday said it would reduce its capital by 20% and offer dividends. Shares in the company closed up 4.7% on the news on Monday in Taipei ahead of the earnings release.
Foxconn doesn't hold earnings calls or briefings.
Write to Yoko Kubota at firstname.lastname@example.org