iPhone Assembler Foxconn Reports One-Percent Drop in Q2 Net Profit Amid Weak Global Demand for Electronics

Apple supplier Foxconn reported on Monday a 1 percent drop in second-quarter net profit, as global economic woes hurt demand for smart consumer electronics. The Taiwanese company, the world’s largest contract electronics maker, said net profit for the April-June quarter slipped to TWD 33 billion (roughly Rs. 8,578 crore) from a revised TWD 33.29 billion (roughly Rs. 8,654 crore) in the same period the previous year.

It was better than an average forecast of TWD 25.57 billion (roughly Rs. 6,648 crore) profit from 13 analysts, according to Refinitiv. Foxconn said it expected revenue for its smart consumer electronics products to slightly decline year on year in the third quarter. That group includes smartphones and makes up about half of Foxconn’s total revenue.

Overall revenue for the third quarter would also fall slightly, the Taiwanese company said, downgrading its outlook for full-year revenue to a slight decline from previous guidance for coming in flat. Foxconn shares rose 1.4 percent ahead of the results on Monday, compared to a 1.3 percent fall in the main market. Its shares have risen 10 percent so far this year.

Earlier this month, Foxconn announced that revenue in July fell 1.23 percent year-on-year and forecast a business rebound for the third quarter. Foxconn, formally called Hon Hai Precision Industry, said revenue last month reached TWD 469.23 billion (roughly Rs. 12,199 crore), up nearly 11 percent from June.

The company said revenue was the second-highest for the month of July, thanks to “customers’ increasing pull-in” for its smart consumer electronics products, including smartphones. That segment recorded double-digit growth from a year ago, it said, as major vendors such as Apple gear up for new product launches later this year.

Other businesses, including computing products such as PCs and cloud and networking products, declined from a year ago, the company said, without elaborating. 

© Thomson Reuters 2023 

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