Foxconn set to spin off the 'conn,' boost profits

Hon Hai Precision Industry Chairman and CEO Terry Gou says that his company's profits will "surpass last year's," in part by spinning off its connector business.

Jay Greene/CNET

Hon Hai Precision Industry, which operates under the Foxconn brand, will generate higher profits this year, the company's chairman and CEO said on Wednesday.

Speaking to shareholders at his company's annual meeting in Taipei, Terry Gou guaranteed that Hon Hai's profits this year "will surpass last year's" and added that growth will hit 15 percent year over year.

There has been some concern over Hon Hai's performance as analysts have predicted that iPhone and iPad shipments will stall, leading to Hon Hai generating less revenue. However, the company thinks it can overcome declining shipments by increasing production efficiency and investing in new technologies, Bloomberg reported on Wednesday from the meeting.

To further improve his business, Gou confirmed that he will be spinning off the company's connector business, which makes cables and other accessories. For years, the business was a key component in Foxconn's operation -- and was the "conn" in its branding -- but in recent years, its margins have been squeezed. Spinning it off will help Hon Hai focus on its other businesses, Gou said, according to Bloomberg.

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