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Foxconn shows Record Profits thanks to the iPhone 6
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The world leader in electronic subcontracting has annual net profit of 3.86 billion euros. The end of the year was particularly good, with historical sales of Apple.

Thank you Apple … The Taiwanese giant Foxconn Technology, the world leader in outsourcing electronics, posted record profits in 2014 thanks to the success of the iPhone 6 he assembles in its Chinese factories. Foxconn or Hon Hai Precision Industry, fired half of its revenues of Apple’s new flagship product while other customers have long faces, the stated objective of a growth in annual turnover of 10% n was not reached.

Net income came out up 22.3% to 130.5 billion Taiwan dollars (3.86 billion euros), for a turnover up 6.6% only to 4.200 billion TWD . “Net earnings proved better than expected. The ability to absorb heavy Foxconn Apple orders in such a short time enables it to generate higher margins, “noted Vincent Chen of Yuanta Investment Consulting.

The operating margin stood at 4.2% in the fourth quarter, the highest in five years, according to Bloomberg.

The fourth quarter was particularly good, with net profit up over 30%, reflecting the historical iPhone sales over the same period. Apple has indeed sold a record 74.5 million units of iPhone in the three months of year end corresponding to the first quarter of its 2014/2015 fiscal shifted, allowing it to generate a net profit up 37.9% to 18.02 billion dollars, a record for an American company in three months.

 

Fierce competition on the iPhone

Competition is nevertheless fierce between subcontractors and the market fears that Foxconn does make cutting cruppers as he has long been the exclusive assembler of the iPhone and the iPad. Apple recently expanded its list of providers by partnering with Quanta Computer, Pegatron, Wistron and Compal Electronics. Foxconn could therefore not clinch that 69% of iPhone orders this year, compared to 87% in 2014, according to Vincent Chen.

To overcome these difficulties, the Taiwanese industry is seeking to diversify its business and customer base. Its subsidiary FIH Mobile, which produces smartphones excluding Apple devices, has an excellent year in 2014 with net earnings and higher income analyst expectations.

Investment in Sharp?

Foxconn would otherwise be about to resume talks with the Japanese electronics group Sharp, seeking funds to provide it with financial aid.

Foxconn boss Terry Gou recently expressed to the Japanese press of his intention to make a proposal to this effect to the largest banks in Sharp (Mitsubishi UFJ and Mizuho), first in line in the restructuring prepared by the specialist screens strong competition from smartphones and TVs in this field.

Sharp had already concluded in 2012 an agreement with Hon Hai providing an entry from the latter in his round to the tune of some 10%, but negotiations on the details of that investment petered out thereafter because of the fall Sharp action.

If Hon Hai ended up investing in Sharp, it would however be subject to conditions, according to Mr Gou which plans to make concrete suggestions for restructuring before eventually crossing the Rubicon.

Title Hon Hai was down 1.91% at 4:30 GMT at the Taipei Stock Exchange, TWD 92.2 dollars.

 

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