Hon Hai reports highest-ever Q2 net profit on AI server boom

Taipei, Aug. 14 (CNA) Taiwan-based manufacturing giant Hon Hai Precision Industry Co. on Thursday reported record high net profit for the April-June period, with the company benefiting from solid global demand for artificial intelligence servers.

In a statement released ahead of an investor conference, Hon Hai, also known as Foxconn globally, said it posted NT$44.36 billion (US$1.48 billion) in the second quarter, up 27 percent from a year earlier and up 5 percent from a quarter earlier.

Hon Hai's second quarter earnings per share stood at NT$3.19, up from NT$2.53 a year earlier and up from NT$3.03 a quarter earlier.

In the second quarter, Hon Hai posted NT$1.79 trillion in consolidated sales, up 15.82 percent from a year earlier and up 9 percent from a quarter earlier.

Due to strong global demand for AI servers, Hon Hai's cloud and networking division accounted for 41 percent of total sales in the second quarter, up from 34 percent in the first quarter, while the smart consumer electronics division represented 35 percent of total sales in the second quarter, down from 40 percent in the first quarter.

The computing division made up 18 percent of second quarter total sales, down from 19 percent in the quarter earlier, while the electronic components division accounted for 6 percent of total revenue in the second quarter, down from 7 percent in the previous quarter.

Hon Hai said AI server revenue in the second quarter surged more than 60 percent from a year earlier.

In the second quarter, Hon Hai's gross margin -- the difference between revenue and cost of goods sold -- stood at 6.33 percent, down 0.09 percentage points from a year earlier but up 0.22 percentage points from a quarter earlier.

Hon Hai said its operating margin -- the difference between sales and cost of goods sold and operating expenses -- hit 3.16 percent in the second quarter, up 0.28 percentage points from a year earlier and up 0.33 percentage points from a quarter earlier.

Hon Hai noted that its net margin -- the difference between gross profit and total expenses including interest payments and taxes -- stood at 2.47 percent in the second quarter, up 0.21 percentage points from a year earlier but down 0.09 percentage points from a quarter earlier.