Foxconn Banking on Apple Lift After August Sales Drop

Workers assemble electronic products at a Foxconn factory. Photo: Reuters

Foxconn, the world’s largest contract electronics maker, saw its sales drop last month but predicted it will get a bounceback boost from Apple’s new product releases due to be unveiled next week.

The Taiwan tech giant, which is a major supplier for Apple, revealed on Tuesday that revenue in August fell 8% year-on-year. Foxconn, formally called Hon Hai Precision Industry Co Ltd, said revenue last month reached T$412.83 billion ($12.93 billion), down 12% from July.

Revenue in its smart consumer electronics products, including smartphones, declined in August on the year due to “customers’ conservative pull-in”, the company said in a statement without elaborating.

Summer is traditionally a busy time for Foxconn as major vendors such as Apple gear up for new product launches ahead of the end-of-year holiday shopping season.

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“With the second half of the year peak season currently underway, operations will gradually ramp up,” Foxconn said.

“The outlook for the third quarter, which will be better than the second quarter, is expected to increase at an on-quarter pace higher than the average level of the previous two years.”

Apple will host its fall event on September 12, setting the stage for what analysts believe will be the unveiling of a new line of iPhones and smartwatches.

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

Foxconn beat estimates for second-quarter earnings unveiled last month thanks to a booming artificial intelligence sector but it retained a cautious outlook for this year due to global economic uncertainties.

The company downgraded its outlook for full-year revenue to a slight decline from a previous guidance of flat as it joined other companies grappling with a weak global economy and a sluggish recovery in China.

Foxconn’s Taipei-listed shares closed up 0.5% on Tuesday ahead of the release of its August sales, compared with flat in the broader market.

Reuters with additional editing by Sean O’Meara

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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.