Foxconn posts record profits citing increased efficiency of iPhone and iPad production

Hon Hai Precision Industry Co, better known by its parent company name Foxconn, posted record quarterly profits in the final quarter of last year, citing increased production and improved efficiency of iPhones and iPads, as reported by Bloomberg.

Net income rose 5.6 percent to $1.2 billion, ahead of analyst expectations, but may face more challenging times ahead …

Hon Hai solved production problems that had crimped output of the iPhone 5 in the prior quarter, helping it raise revenue and margins. The Taipei-listed flagship of Terry Gou’s Foxconn Technology Group may face a drop in sales and profit this quarter as demand for the iPhone wanes amid growing competition from Samsung Electronics Co. … Vincent Chen, who rates the stock buy at Yuanta Financial Holding Co. in Taipei. “Shipments of iPhone started to drop significantly in the first quarter and there may be no new product to boost sales a lot in the second quarter either.”

Bloomberg speculated that Foxconn’s increased profitability while Apple’s margins fell may suggest that the supplier has been able to negotiate higher prices for components and assembly.