SHCAY Sharp Corporation (PK)

BEIJING—New iPhones powered a bigger-than-expected rise in Foxconn Technology Group's third-quarter net profit, as the world's largest electronics contract manufacturer weathered a smartphone slowdown.

Apple Inc. so far hasn't been hit by recent sluggishness in the smartphone sector, but some analysts caution that iPhone sales may slow in coming quarters. Taiwan-based Foxconn -- formally called Hon Hai Precision Industry Co. -- is Apple's main iPhone assembler.

Foxconn said on Monday its third-quarter net profit rose 11% to 37.9 billion New Taiwan dollars (US$1.16 billion) from NT$34.09 billion a year earlier. The results beat the NT$34.8 billion average estimate of 10 analysts surveyed earlier by Thomson One Analytics. Revenue rose 12% to NT$1.07 trillion from NT$950.5 billion a year earlier. The company doesn't give guidance or hold earnings conferences.

Foxconn assembles many of the world's most popular gadgets on behalf of customers such as Apple, largely from factories in China. It has sought to expand to more profitable sectors in recent years as rising labor costs in China squeeze margins for electronics manufacturing. The company has been in discussions to buy Sharp Corp.'s struggling liquid-panel display business and has invested in other sectors ranging from industrial robots to mobile-phone recycling. But its fortunes are still closely tied to Apple's, with nearly half its revenue derived from the client, according to analysts.

Apple launched two new large-screen iPhones in late September that feature a "Force Touch" technology, which can distinguish between a strong press and a light tap. The Cupertino, Calif., company reported a 31% earnings jump in October and forecast sales growth for the current quarter.

Many of Apple's rivals have had it tougher. Growth in the global smartphone market slowed to 6.8% in the third quarter, from a 25.2% pace a year earlier, according to market research firm IDC.

LG Electronics Inc. reported a steep drop in net profit for the third quarter, weighed by weak smartphone sales, while Taiwanese handset maker HTC Corp. swung to a net loss. Closely held Chinese smartphone maker Xiaomi Corp., a startup darling accustomed to triple-digit percentage growth, reported its first drop in sales in the third quarter, as results were hit by market saturation in China, according to market researcher Canalys. Samsung Electronics Co. returned its mobile division to operating-profit growth in the quarter, although the unit grew more slowly than its other businesses.

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

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(END) Dow Jones Newswires

November 16, 2015 06:15 ET (11:15 GMT)

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