iPhone Assembler Foxconn Posts Near 90% Drop in First Quarter Profit
Apple's main iPhone assembler Foxconn posted an almost 90 percent drop in first-quarter profit on Friday, as the impact of the global health crisis hit production demand from clients (via Reuters).
But the Taiwanese electronics manufacturer said the worst was over, and the company would "stabilize in the second quarter," adding that it expects revenue to show double-digit growth in comparison to the first quarter.
Foxconn reported net profit of T$2.1 billion ($70.25 million) for the January-March quarter, falling well short of a Refinitiv consensus estimate of T$8.88 billion drawn from 14 analysts.
Foxconn slashed its 2020 revenue outlook in March after strict quarantines were enforced at its China plants for a period in February, at the height of the crisis, which has now largely resolved in the country.
Apple sold fewer than 500,000 iPhones amid the ongoing curbs on travel and transport – a 60 percent slump in iPhone sales compared to the February 2019 quarter. The same month, Apple announced that its financial guidance for the March quarter would fall short. Foxconn went on to suffer its biggest monthly drop in revenue in about seven years because of the containment measures.
The manufacturer had earlier claimed the viral outbreak had had a "fairly small impact" on iPhone production, suggesting its factories in other countries like Vietnam, India, and Mexico had been able to fill the gap.
It and other factories in China have reportedly implemented stringent measures to prevent the another viral outbreak in the country, while the Chinese government is mandating that employers check temperatures and provide face masks to employees, as well as submitting daily reports on workers' health statuses.
Foxconn has since resumed normal operations at all of its main factories in China.
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