Hon Hai's Q3 net profit hits record high amid AI boom

Detailed summary

Taiwan-based manufacturing giant Hon Hai Precision Industry Co. on Thursday reported record net profit in the third quarter, up more than 30 percent from a year earlier, amid strong growth in artificial intelligence (AI) server and rack shipments driven by massive investment in AI infrastructure.

Taipei, Nov. 12 (CNA) Taiwan-based manufacturing giant Hon Hai Precision Industry Co. on Thursday reported record net profit in the third quarter, up more than 30 percent from a year earlier, amid strong growth in artificial intelligence (AI) server and rack shipments driven by massive investment in AI infrastructure.

In a statement, Hon Hai, also known globally as Foxconn, said its net profit totaled NT$77.52 billion (US$2.35 billion) in the July-September period, up 34 percent from a year earlier and 29 percent from the previous quarter.

Earnings per share (EPS) stood at NT$5.51 in the third quarter, compared with NT$4.15 a year earlier and NT$4.27 in the second quarter.

Hon Hai, which has been diversifying its product portfolio and integrating its hardware and software capabilities, posted consolidated revenue of NT$3.02 trillion in the third quarter, up 46 percent from a year earlier and 19 percent from the previous quarter.

The company said its cloud and networking division accounted for 54 percent of total revenue in the third quarter, up from 51 percent in the second quarter.

Its smart electronics, computing and electronics components divisions accounted for 29 percent, 12 percent and 5 percent of revenue, respectively, in the third quarter.

The world's largest contract electronics maker said its gross margin -- gross profit as a percentage of revenue -- stood at 6.02 percent in the third quarter, down 0.33 percentage points from a year earlier and 0.1 percentage points from the previous quarter.

Its operating margin -- operating profit as a percentage of revenue -- reached 3.83 percent in the third quarter, up 0.40 percentage points from a year earlier and 0.07 percentage points from the second quarter.

Hon Hai added that its net profit margin -- net profit as a percentage of revenues -- stood at 2.57 percent, down 0.23 percentage points from a year earlier but up 0.20 percentage points from the previous quarter.

Opening of the article, excerpted from Focus Taiwan (CNA). To read the rest, open the article on the publisher's site.