Hon Hai Precision (HNHPF) , better known as Foxconn and the world's biggest assembler of Apple Inc. (AAPL) - Get Report products, posted its biggest quarterly profit decline in nearly a decade Wednesday after supply chain delays for the flagship iPhone hit sales and squeezed margins.
Foxconn said net income for the three months ending in September fell 39% from the same period last year to just under $700 million, well shy of analysts' forecasts and the biggest decline since the fourth quarter of 2008. Operating expenses at the Taiwan-based group also increased, compressing net margins to under 2%
The profit slump reflects both delays and snags in Apple's production process and the gap between the September launch of the iPhone 8 and the November debut of its anniversary iPhone X. Foxconn, which gets about half of its revenues from Apple and says it's the exclusive assembler of the iPhone X, doesn't forecast sales or profits nor does it host a conference call with analysts.
Apple shifted 10.3 million iPads over its fiscal fourth quarter, the company said on Nov. 2, a figure that helped the world's biggest tech company hit $52.6 billion in revenues for the period and boost its Q1 outlook for sales to as high as $87 billion amid robust demand.
Hon Hai shares were marked 2.93% lower in Taiwan Wednesday, extending their three-month loss to around 12.3%.
The disappointing earnings, however, followed approval from the Wisconsin Economic Development Corporation for a $3 billion package of incentives that will help the company build a liquid crystal display plant that will ultimate create as many as 13,000 new jobs.
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