Apple supplier Foxconn records third consecutive fall in yearly profit
A slowing smartphone industry seems to be to blame…
What you need to know
- Apple supplier Foxconn has reported its third consecutive fall in profits in three years.
- A waning smartphone industry meant profits fell by 10% to around $3.8 billion.
- Looking forward, the current economic climate and global pandemic could have a “major impact” on the second half of the year.
Apple’s main iPhone supplier Foxconn has recorded its third consecutive fall in yearly profit in as many years as the global smartphone market continues to wane.
According to Nikkei Asian Review:
MARCH 30, 2020 21:31 JST
TAIPEI — Key iPhone supplier Foxconn on Monday reported a third consecutive year of lower profits as the smartphone industry continues to slow.
Net income at Foxconn, formally traded as Hon Hai Precision Industry, fell 10% to 115.3 billion New Taiwan dollars ($3.81 billion) in 2019, while operating income dipped nearly 16% on the year. The company’s gross margin was 5.9%, lower than the 6.27% in 2018 and well below its goal of 10% by 2025.
Net profit for the key iPhone assembler climbed NT$47.8 billion in the final quarter of 2019, supported by the launch of the new iPhone 11 range in late September. However that represents a decline of more than 20% from the same period of 2018, due to a delayed shipment of the previous year’s iPhone that resulted in higher comparisons, market analysts said.
According to the report, the branch of Foxconn that serves its Android customers recorded a net lot of 2019, however, the loss was significantly smaller than 2018, where it lost $857 million.
Looking ahead, the report notes that Foxconn has endured a tough start to 2020, and it has previously estimated that its revenue would fall by about 15% year-on-year in the first quarter.
The report notes that the global tech supply chain is “braced for uncertainty as worldwide demand for electronics shows significant signs of weakening.”