Hon Hai’s Gou Guarantees Profit Increase Amid Sales Challenge

Billionaire Terry Gou promised higher earnings at Hon Hai Precision Industry Co. even as analysts predict the maker of Apple Inc.’s iPhones and iPads will post its first profit drop in five years.

“I guarantee profit this year will surpass last year’s,” Gou, chairman of Hon Hai, said at the company’s annual meeting in Taipei yesterday without providing a specific earnings number. The company is staying with its 15 percent growth target, he said.

Hon Hai, flagship of the Foxconn Technology Group, faces slowing sales to Apple, its largest client, as well as a weak personal-computer industry and stalling global economy. The company has boosted production efficiency and invested in new manufacturing technologies to help improve profit margins.

Net income will fall to NT$92.8 billion ($3.1 billion) in 2013 from NT$94.8 billion a year earlier, according to the average of 23 analyst estimates compiled by Bloomberg. A decline in annual earnings would be the first by the Taipei-based company since 2008.

Gou is also planning to spin off business including cables, connectors and nanotechnology, beginning with its Foxconn Interconnect Technology unit, he said.

That strategy will help Gou focus on the company’s core strengths as well as new businesses such as e-commerce, he said. The move also may help those units gain visibility and attract orders, Chief Financial Officer Huang Chiu-lien said in an interview yesterday.

Gou said he’ll conduct regular meetings with small shareholders, with the first to be held by early October. Hon Hai doesn’t hold investor conferences, provide revenue breakdowns or offer earnings guidance.

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