Hon Hai shares drop as profits fall

Published:  30 Apr at 6 PM

As reported by the BBC, shares in Hon Hai, owner of Foxconn, fell after the electronic parts maker announced weaker-than-anticipated profits for 2012’s first quarter. Its shares dropped by about 7% during early trading.

Last Saturday it reported making a net profit of about NT $14.9 billion ($511 million, or £314 million) during the January-to-March period, compared to NT $35 billion during the prior quarter.

Hon Hai, which manufactures electronic components for the Kindle, Wii and iPhone, has watched its costs soar amid rising wages. The company has been establishing new factories in an effort to relocate its production to inner regions in China.

The firm is Foxconn’s parent company, which makes products for many of the largest brands on the globe. Hon Hai’s results arrive just days following Apple’s announcement that its profits nearly doubled during 2012’s first three months.

Apple said that it churned a net profit of around $11.6 billion (£7.2 billion), a rise from $6 billion during the same period in 2011--much higher than what analysts had expected. The IT firm sold thirty-five million iPhones during the quarter, which was nearly double the amount from 12 months ago.