Apple Inc. (AAPL) Supplier Foxconn Q2 Sales Beat Estimates

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Apple Inc. (NASDAQ:AAPL) shares are always worth monitoring, but today they will require special attention due to the strong quarterly results from one of its key manufacturers, Foxconn Technology Co., Ltd. (TPE:2354) (OTCMKTS:FXCOF), or Hon Hai Precision Industry Co., Ltd.-ADR (OTCMKTS:HNHPF) (TPE:2317).

Strong Sales data

As per the data revealed by Hon Hai Precision Industry Co., Ltd.-ADR (OTCMKTS:HNHPF) (TPE:2317) parent firm for Foxconn Technology Co., Ltd. (TPE:2354) (OTCMKTS:FXCOF), sales for the second quarter came in at NT $896.87 billion (about $29.81 billion), up 10.9 percent from the previous quarter and 0.6 percent the same period last year. Revenues beat the analyst expectations NT $848.78 billion.

Foxconn, which manufactures iPhones and iPads for Apple Inc. (NASDAQ:AAPL), gets 60 percent of its sales from Apple Inc. (NASDAQ:AAPL). Other big clients of Foxconn Technology Co., Ltd. (TPE:2354) (OTCMKTS:FXCOF) are Hewlett-Packard Company (NYSE:HPQ) and Dell Inc. (NASDAQ:DELL).

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Challenging times ahead

In June, Foxconn CEO Terry Gou told that achieving the 15 percent target growth will be “challenging”, owing to slow consumer demand fueled by stagnant global growth.

It will be a challenge for Foxconn this year to deliver the profit growth promised by Chairman Terry Guo. The company is facing reduced demand from Apple Inc. (NASDAQ:AAPL), falling popularity of PC’s and general global economic stagnation. To fulfill the promises, Hon Hai Precision Industry Co., Ltd.-ADR (OTCMKTS:HNHPF) (TPE:2317), in its shareholder meeting in late June, revealed plans to spin off several of its business units. The company may consider splitting connectors, or basic devices for joining electrical circuits, the reason being these units are slower growing compared to the other businesses.

Foxconn ups recruitment for Apple

Apple Inc. (NASDAQ:AAPL) is expected to come out with new devices like the next-gen iPhone and low cost iPhone soon, which gives more opportunity to Foxconn Technology Co., Ltd. (TPE:2354) (OTCMKTS:FXCOF) to increase revenues.

In fact, a Chinese-language report claimed Tuesday that Foxconn has started the recruitment for the next-gen iPhone.

As per the report, a recruitment firm that works with Hon Hai Precision Industry Co., Ltd.-ADR (OTCMKTS:HNHPF) (TPE:2317) (aka Foxconn) plant in Zhengzhou, has started massive recruitment drive for production of Apple Inc. (NASDAQ:AAPL)’s next-gen phone. The device in the report is referred to as iPhone 6,” however, there has been no confirmation from Foxconn yet.

Hon Hai Precision Industry Co., Ltd.-ADR (OTCMKTS:HNHPF) (TPE:2317) currently has 210,000 workers at its plant, which is less than the peak of 300,000 in 2012. In a CBN article, a reference has been made to a possibly different product from the one currently in production, which has “borderless” design, aluminum and carbon fiber shell, and chassis weight 40 percent less than the iPhone 5.

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