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Foxconn Sees 5% Profit Rise Despite Lockdowns, Weak Demand

The Taiwanese group, which is a key supplier for Apple, reported a 4% rise in first-quarter revenue despite chip shortages, supply chain issues and reduced demand for electronics


Foxconn is expanding its facility in northern Vietnam, local media said on Saturday.
A motorcyclist rides past the logo of Foxconn in Taipei. Reuters

 

Despite severe semiconductor shortages, supply chain issues and reduced demand for consumer and industrial electronics, Apple supplier Foxconn Technology Group managed a 5% rise in first-quarter profits.

The Taiwanese company, the world’s largest contract electronics maker, reported a 4% rise in first-quarter revenue and said it expected revenue for both the second quarter and the full year to be flat.

Demand for consumer electronics including smartphones – its key growth driver – has stalled due to coronavirus lockdowns in China and travel and other restrictions elsewhere.

Net profit for the January-March quarter rose to NT$29.45 billion ($985.48 million), compared with an average analyst estimate of NT$29.76 billion, according to Refinitiv.

Foxconn, like other global manufacturers, has grappled with a severe shortage of chips that has squeezed smartphone production, and more recently with a downturn in major markets amid high inflation and the war in Ukraine.

While the company, formally called Hon Hai Precision Industry, has previously said that Covid-19 controls in China have only had a limited impact on its production, demand for its products in the country has suffered as people remain shut in.

Foxconn shares closed 1% lower ahead of the earnings release, versus a 2.4% drop in the broader market. They have fallen about 2% so far this year, giving the company a market value of $48.1 billion.

 

  • Reuters, with additional editing by George Russell

 

 

READ MORE:

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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