Apple supplier Foxconn’s Q4 revenue falls as smartphone sales slip By Reuters

By Yimou Lee and Ben Blanchard

TAIPEI (Reuters) – Taiwan’s Foxconn, the world’s largest contract electronics maker that counts Apple (NASDAQ:) as a major client, reported a 6% fall in revenue, its first in five quarters, hurt by a drop in sales of consumer products including smartphones.

The company had predicted an up to 15% year-on-year fall in revenue for the fourth-quarter citing the impact of a year-long shortage of chips that has disrupted production at companies from Apple to GM.

In the fourth quarter, revenue from Foxconn’s key smart consumer and electronics products business that includes smartphones, fell between 3% to 15%, Foxconn said.

Revenue from its cloud and networking products as well as computing products was flat. Components revenue rose more than 15%.

Sales in the quarter were up against a high base in the year-ago period, analysts said, when demand for smartphones and personal gadgets had sky-rocketed as the coronavirus pandemic raged.

Chairman Liu Young-way gave a cautious outlook in November for business this year due to uncertainties surrounding the pandemic, inflation, geopolitical tensions and supply chains.

On Wednesday, the company, which is formally called Hon Hai Precision Industry Co Ltd, said it expected revenue for the first quarter as well as the year to range between a 3% fall and a 3% rise.

Analysts expected revenue this year to rise 1.2%.

The company on Monday suspended operations in the Chinese city of Shenzhen to comply with the local government’s COVID-19 control policies and said it will deploy backup plants to reduce disruption to production.

Foxconn said on Wednesday some operations had been restored at its Shenzhen campuses, where the company had both housing and production facilities.

Foxconn shares closed 0.5% higher ahead of the earnings release, versus a 0.1% gain in the broader market. They have fallen 2.4% so far this year.

Net profit fell 3.4% to T$44.4 billion ($1.55 billion) in the October-December period. That compared with the T$43.32 billion average of 10 analyst estimates compiled by Refinitiv.

($1 = 28.5700 Taiwan dollars)