Foxconn posts lower than expected Q2 profit

Foxconn (Hon Hai) has posted its second quarter figures today, revealing an increase in profit, but less than what was forecasted – we wonder why.

The Chinese supplier of goods for big boys like Apple, Dell, and HP saw Q2 growth rising by 11 percent.

It posted a net profit of NT$16.7 billion ($521 million) for the second quarter, up from NT$15 billion ($468 million) at the same time last year. However, this was a big drop compared to Foxconn’s first quarter profit, which was NT$18 billion ($562 million). 

This was also significantly less than analyst forecasts, which expected profits as high as NT$19.4 billion ($605 million). A number of factors may have affected the lower profit, including global uncertainty in the industry. 

However, other companies have seen higher than expected profits during the same period, making it much more likely that the lower profit was due at least in part on all the money spent on its suicide PR disaster, including a 30 percent increase in staff wages for Foxconn workers to keep them going. There were a number of other measures aimed at reducing the suicide rates, including nets and counselling.

“Despite the general uncertainty and a so-called challenging environment, under the backdrop of an increased weighting in company’s consumer electronics business, the quarterly unconsolidated results were as expected and remain seasonal,” said Edmund C.A. Ding, a spokesperson for Foxconn.