SHCAY Sharp Corporation (PK)

By Liza Lin and Eva Dou 

HONG KONG -- Foxconn Technology Group, the main manufacturer of Apple Inc. devices, posted an 8.7% decline in third-quarter profit, weighed down by recently acquired Japanese electronics maker Sharp Corp.

Losses at Sharp were a drag on what was otherwise a quarter of brisk sales because of production of the iPhone 7 for Apple, Foxconn's largest customer.

Foxconn, which is formally known as Hon Hai Precision Industry Co., said on Friday its profit fell to $34.6 billion New Taiwanese dollars ($1.09 billion), but it still beat the NT$33.3 billion average estimate of nine analysts polled by Capital IQ.

Revenue rose to NT$1.075 trillion from NT$1.066 trillion a year earlier.

Foxconn completed its $3.8 billion acquisition of Sharp in August after years of tumultuous negotiations and last-minute hitches that almost derailed the deal. Sharp's advanced flat-screen panel business fits into Foxconn's strategy to expand into high-end components -- a more lucrative business than electronics assembly.

Foxconn, the world's biggest electronics assembler, has said it would help Sharp speed its efforts to mass-produce organic light-emitting diode, or OLED, displays, a technology that holds promise for next-generation gadgets with flexible screens. Apple is considering adopting this technology for iPhones as early as next year, The Wall Street Journal has reported.

But Sharp's new chief executive, Tai Jeng-wu, said recently that he hasn't yet decided if his company will commit fully to OLED or stick with more widely used liquid-crystal displays.

While manufacturing devices for Apple is still Foxconn's largest source of revenue, the Taipei-based company increasingly has diversified into other high-tech fields ranging from telecommunications infrastructure to robotics and e-commerce.

Sharp, which remains listed on the Tokyo Stock Exchange, last week reported a quarterly net loss of Yen17.9 billion ($170.8 million) but said it would return to profitability by the end of the fiscal year, which ends March 31.

Write to Eva Dou at eva.dou@wsj.com

(END) Dow Jones Newswires

November 12, 2016 02:47 ET (07:47 GMT)

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