Apple Supplier Foxconn Posts Record Profits Thanks To iPhone Production Improvements



As Apple has become more successful over the last few years, Hon Hai Precision Industry’s (Foxconn) financial fortunes have been more tightly bound to Apple’s than ever before.

If things are going well for Foxconn, then Apple’s probably doing pretty well too, so investors were happy to hear that Foxconn just posted its most profitable quarter ever thanks to improved production efficiency of the iPad and iPhone 5.

Bloomberg reported this morning that Foxconn’s fourth-quarter net income rose 5.6 percent to $37 billion, which is about $1 billion more than the $35.9 billion analysts estimated for the company.

By solving production problems that hurt iPhone 5 output in the previous quarter, Foxconn was able to raise revenues and margin. Once the bottlenecks in production were solved, it’s likely that Foxconn was able to negotiate for better pricing with Apple.

Foxconn’s net income rose 16% in 2012 from $81.6 billion to $94.8 billion.  The only bummer for Foxconn is that it’s probably looking to face a dip in sales this quarter as the iPhone 5’s popularity slows and rumors of a new iPhone ramp up.


Source: Bloomberg