Hon Hai Precision Industry Co.’s profit beat estimates as it announced a doubling of its dividend to a record after the maker of Apple Inc. iPhones cut costs.
First-quarter net income climbed 55 percent, the fastest pace in two years, to NT$30.4 billion ($998 million), beating the NT$28.6 billion average of 13 analysts’ estimates compiled by Bloomberg. Its global depositary receipts rose in London.
Hon Hai, the largest member of billionaire Terry Gou’s Foxconn Technology Group, benefited from improved production yields and lower costs amid record first-quarter sales in the industry’s traditional low season. The board today proposed increasing the cash dividend to a record as Hon Hai returns some of the $23.6 billion cash it has on the balance sheet.
Hon Hai, Taiwan’s second-largest company by market value, doesn’t provide revenue breakdowns or forecasts, or hold investor conferences. Apple accounts for about half its sales.
Its cash dividend for 2014 will be NT$3.80, the Taipei-based company said in a separate filing, more than double the NT$1.60 it paid the prior year and surpassing the NT$2.50 Bloomberg Dividend Forecast prior to the announcement. The board also planned paying a 5 percent stock dividend, with both proposals requiring shareholder approval.
London-traded global depositary receipts surged as much as 4.4 percent Friday after the earnings and dividend announcements to the highest intraday level since Nov. 13. The stock dropped 0.6 percent to NT$93.10 at the close in Taipei before the earnings announcement.
First-quarter sales, announced last month, climbed 15 percent to NT$1.01 trillion, missing the NT$1.06 trillion average of analysts’ estimates at the time.
Both gross margin -- a gauge tracked by investors to measure how efficiently the company churns out products without defects -- and operating income, beat analyst estimates.