Hon Hai reports highest Q2 net profit in AI boom

Taipei, Aug. 14 (CNA) Taiwan-based manufacturing giant Hon Hai Precision Industry Co. on Wednesday reported its highest-ever second quarter net profit amid a boom in artificial intelligence development worldwide.

In a statement, iPhone assembler Hon Hai, which also rolls out AI servers, said it posted NT$35.05 billion (US$1.09 billion) in net profit, up 59 percent from a quarter earlier and up 6 percent from a year earlier.

The company's earnings per share (EPS) stood at NT$2.53 in the second quarter, compared with NT$1.59 in the first quarter and NT$2.38 percent over the same period of last year.

Before the second quarter results were released, Hon Hai, also known as Foxconn on the global market, had forecast operations for the April-June period would be boosted by solid demand for AI servers.

In the second quarter, Hon Hai said, its consolidated sales rose 17 percent from a quarter earlier to NT$1.55 trillion, which is also up 19 percent from a year earlier.

Hon Hai said its gross margin -- the difference between revenue and cost of goods sold -- reached 6.42 percent in the second quarter, up from 6.32 percent a quarter earlier and 6.41 percent a year earlier.

The company's operating margin -- the difference between sales, the cost of goods sold and operating expenses -- grew to 2.88 percent from 2.78 percent a quarter earlier and 2.37 percent a year earlier, Hon Hai said.

In the second quarter, Hon Hai said, its net margin -- the difference between gross profit and total expenses including interest payments and taxes -- stood at 2.26 percent, up from 1.66 percent in the first quarter, but was down from 2.53 percent a year earlier.

Hon Hai said its smart consumer electronics division accounted for about 40 percent of the company's total sales in the second quarter, with the cloud and networking division making up 32 percent, the computing division 21 percent and the electronics components division 7 percent.

In the first half of this year, Hon Hai registered NT$57.05 billion in net profit, up 24.5 percent from a year earlier with EPS at NT$4.12, up from NT$3.31 a year earlier.

In the first half of the year, the manufacturer's after-tax profit margin rose 0.32 percentage points from a year earlier to 1.98 percent.

Hon Hai announced its second quarter results after the stock market closed. Its shares rose 2.49 percent to close at NT$185.50, serving as a driver to gains on the local main board, which increased by 1.06 percent.