The numbers aren’t where Foxconn, Apple’s primary supplier, would like them to be.
Foxconn recently reported a 56 percent decline for its first-quarter net profit, a number that represented its largest quarterly decline in three years, the company falling far short of forecasts.
During the January-March quarter, Foxconn disclosed a decline in net profit to T$12.8 billion ($417.17 million) from T$29.45 billion in the corresponding period last year, which was significantly below the average projection of T$29.18 billion in profit by analysts, according to Reuters.
Foxconn attributed a significant portion of the T$17.3 billion markdown linked to its ownership stake of 34 percent in the Japanese electronics company Sharp Corp.
“Going forward we will work harder on the management of our investment businesses,” Foxconn Chairman Liu Young-way said on an earnings call, pointing to the Sharp loss. However, Liu said visibility on Foxconn’s outlook for the year was limited, and the company maintains a conservative outlook.
During the conference call, Chief Financial Officer David Huang, stated that inventory levels were above the norm, and that the company was adjusting to bring them down to a relatively low level by the end of the current quarter.
Foxconn anticipates a year-over-year decrease in revenue for its primary consumer electronics products in the second quarter, which constitute over half of its total revenue. Additionally, the company revised its forecast for cloud and networking products in 2023, now expecting them to remain flat instead of experiencing significant growth as previously predicted.
While overall revenues for the company are projected to decline in the second quarter, Foxconn maintains its full-year forecast of flat revenues. The Apple supplier is also continuing its efforts to expand outside of China, acquiring land in India and Vietnam for large-scale facilities.
Stay tuned for additional details as they become available.
Via AppleInsider and Reuters