Feeds

Foxconn daddy's shares slip on weak Q1 profit

Hon Hai is spending more on staff and new factories

The Power of One Infographic

Foxconn's parent company Hon Hai's shares dropped 7 per cent today after it announced weaker profits than expected in the first quarter.

Hon Hai reported a net profit of NT$14.9bn ($510.8m, £314m) for the quarter, down just a little from the same period last year when the firm made NT$15.3bn ($523.2m, £322m).

The group's costs have been rising as staff wages go up in China and political pressure is applied to improve working conditions at its Foxconn factories – so profits are down despite a rise in revenue.

Hon Hai said revenue for the quarter was NT$50.8bn ($1.7bn, £1.07bn), up from NT$48bn ($1.6bn, £1.01bn) in the same quarter of 2011.

Foxconn manufactures components for tech giants like Apple and Nintendo, but the profit margins on hardware have never been great, regardless of how popular the final product ends up being.

Often the big boys in IT make their money from software and services on their gear, rather than the actual bits of kit.

Foxconn is also reportedly building new factories in the interior of China as well as five new facilities in Brazil.

The secretary of Planning and Regional Development for Sao Paulo announced the new Brazilian fabs in February, but neither he nor Foxconn gave out too much information on the plans. ®

Boost IT visibility and business value

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple ran off to IBM
But never fear fanbois, you're still lapping up iPhones, Macs
Nadella: Apps must run on ALL WINDOWS – PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.