Apple supplier Foxconn cautioned on slowing demand for smart consumer electronics for the year, as it reported a 10% fall in fourth-quarter net profit on Wednesday.
The world’s largest contract electronics maker, which receives more than half of its revenue from consumer products, forecast significant growth this year in other areas such as computing, cloud and networking, and component products.
“We maintain a relatively conservative view towards the smart consumer electronics and think they might decline slightly,” Foxconn Chairman Liu Young said on an earnings call.
Young attributed the decline to various factors including last year’s high base, inflation and the slowing global economy.
Overall, revenues for the first quarter and full year should be flat, the Taiwanese company said.
Net profit for the October-December quarter fell to T$40 billion ($1.31 billion) from T$44.4 billion in the same period the previous year, the company said. That was in line with analysts estimates.
In the fourth quarter, revenue for its key consumer electronics products division was flat compared to a year ago, the company said in a statement, without elaborating.
Foxconn grabbed headlines in November when strict Covid-19 curbs prompted thousands of workers to leave its massive factory in China’s Zhengzhou city. The factory, also the world’s largest iPhone plant, produces the majority of Apple’s premium models including the iPhone 14 Pro.
The crisis disrupted production ahead of Christmas and January’s Lunar New Year holidays. However, the company said in January that production had returned to normal in Zhengzhou.
Last month Apple forecast its revenue would fall for a second quarter in a row. The US giant also said iPhone sales were likely to improve as production had returned to normal in China.
- Reuters, with additional editing by Vishakha Saxena