Hon Hai reports highest Q3 net profit amid AI boom

Taipei, Nov. 12 (CNA) Hon Hai Precision Industry Co. on Wednesday posted a record third-quarter net profit of NT$57.67 billion (US$1.86 billion), boosted by surging demand for artificial intelligence servers.

In a statement, the Taiwan-based manufacturing giant, known globally as Foxconn, said the results represented a 17 percent year-on-year increase and a 30 percent rise from the previous quarter.

Earnings per share for the third quarter stood at NT$4.15, compared with NT$3.55 a year earlier and NT$3.19 in the second quarter, Hon Hai said.

According to Hon Hai, its latest quarterly consolidated sales rose 11 percent compared with the same period last year, and 14.47 percent from a quarter earlier to reach a record NT$2.06 billion.

Amid booming demand for AI products, Hon Hai's cloud and networking division accounted for 42 percent of its total third-quarter sales, up from 41 percent in the second quarter, while its smart consumer electronics division made up 37 percent, compared with 35 percent a quarter earlier.

Its computing division represented about 15 percent of the third quarter's total sales, down from 18 percent in the second quarter, while its electronics component operations stayed little changed at 6 percent.

Hon Hai's gross margin -- the difference between revenue and cost of goods sold -- stood at 6.35 percent in the third quarter, a high in five quarters, while its operating margin -- the difference between sales and cost of goods sold and operating expenses -- reached 3.43 percent, a high since the first quarter of 2019.

In addition, its net margin -- the difference between gross profit and total expenses, including interest payments and taxes -- stood at 2.8 percent in the third quarter, up from 2.66 percent a year earlier and also up from 2.47 percent in the second quarter.

In the first nine months of this year, Hon Hai generated about NT$5.50 trillion in consolidated sales, of which AI servers accounted for NT$1 trillion, the company said.