* Says banking on smartphones, cost cuts
* Shares log biggest 1-day rise since December 2009
(Adds quotes, background)
By Lee Chyen Yee and Huang Yuntao
HONG KONG, May 18 Foxconn International Holdings
Ltd , the world's top contract cellphone maker, expects
a "dramatic improvement" in its 2011 results, its chairman told
shareholders, lifting its shares as much as 15 percent to its
biggest daily gain in more than a year.
The money-losing company, whose parent Foxconn Technology
Group helps assemble Apple Inc's iPhones and iPads, has
been struggling under a host of problems, including rising costs
and labour unrest that have led to staff suicides at its
sprawling production facilities in China.
It is due to be removed from Hong Kong's benchmark Hang Seng
Index on June 7.
During a shareholders' meeting on Wednesday, a small group
of protesters chanted slogans and held up banners, including one
that read "Bloody Apple", to highlight the fight for workers'
rights at Foxconn, a unit of Taiwan electronics giant Hon Hai
Precision Industry Co Ltd .
Foxconn International's shares, which had lost about 20
percent of their value since the start of the year, finished
Wednesday up 11 percent . Intraday, the stock rose as
much as 14.8 percent, the biggest one-day jump since December
Chairman Samuel Chin declined to elaborate on the results
forecast. Analysts on average expect the company to post a net
loss of $12 million for 2011, according to Thomson Reuters
"If you look at the first half, they should break even,"
said UBS analyst Arthur Hsieh in Taipei. "In the fourth quarter
they will have a small profit."
"It's more because of the cost cuts. They have pretty much
done a lot in terms of whatever they can scale down. They are
Foxconn International said it was banking on fast-growing
smartphones and cost cuts, such as selling its Taiyuan
operations to its parent, to improve its bottomline.
"Smartphones previously were a niche market. They have very
much become mainstream products," Chin told a news conference
after the shareholder meeting. "Today's smartphones will become
tomorrow's dummy phones."
"With regard to smartphones, as I mentioned to you before,
our R&D expenses have continued to increase and I can assure you
that a tremendously high amount of that expense is focused
primarily on smartphones/tablets," he said.
Foxconn International, whose customers include Nokia
, Motorola Mobility Holdings Inc and Huawei
Technologies Co Ltd , logged another loss for the second
half of 2010 as the company struggled to regain its footing amid
rising costs and falling prices.
About 70 percent of its revenue comes from Nokia and
Shipments of smartphones, which allow users to surf the
Internet, take pictures, and send email as well as make phone
calls, are expected to grow to 97.2 million units this year, up
from 55.8 million last year, industry figures showed.
But some analysts cautioned that the strong feature-phone
focus of Foxconn International's client base could make it
difficult for the company to perform well in the near future.
(Editing by Chris Lewis and Muralikumar Anantharaman)