Related topics
  • ,
  • ,
  • ,

Cocky Foxconn tells tech biz: We'll design your mobes, you do the ads

Factory barons upbeat after smashing profit prediction

The phone-making division of Foxconn swung into the black with a net profit of $75.1m (£47.5m) in 2011, according to its latest preliminary report to the Hong Kong Stock Exchange [PDF].

It also offered to take care of all the tough stuff in product design, leaving the marketing and branding to its tech titan clients.

The result is double the manufacturer's predicted profits for the financial year ending 31 December - Thomson Reuters analysts had forecast a profit of just $27m - and a contrast to the $219m (£138) loss that the mobe maker sustained in 2010.

Foxconn International churns out phones for Nokia, Sony and Motorola and is a subsidiary of Hon Hai Industries which also runs Foxconn Technology - the light-metals manufacturer that produces the iPhone and iPad among other gear.

The 2011 turnover for Foxconn International was $6.35bn, down 4.1 per cent from 2010's $6.63bn, but the company managed to grow its margins, an improvement that management attributed to attracting more high-end contracts for 3G smartphones rather than simpler and cheaper handsets. The management touted Foxconn's "one-stop-shop solutions" in design, manufacturing and logistics as being particularly attractive to clients.

Foxconn boasted that it leaves only the marketing to the brands that hire them: "Our customers can now focus on product positioning, marketing, sales and distribution while leaving us to take care of their product design and supply chain" said the report.

Bosses also listed ways they had cut costs in 2011, chiefly by "right-sizing capacity", getting rid of equipment that wasn't being used and cutting back on R&D in some areas.

Foxconn International also axed 27,819 jobs, reducing its workforce to 98,868 employees from 126,687 in 2010 and cutting the staffing bill by $22m to $533m. More job cuts may come as manufacturing automation was tipped as pivotal to long-term success in the management's outlook predictions.

Earnings per share were 1.01 US cents, up from a loss 3.06 cents a share in 2010. ®

Sponsored: Designing and building an open ITOA architecture