Apple supplier Foxconn third-quarter profit growth near flat, beats estimates
Reuters
Published Nov 12, 2020 07:34
TAIPEI (Reuters) - Foxconn (TW:2317), the world's largest contract electronics maker, reported near flat quarterly profit on Thursday, beating market estimates amid firm demand for telecommuting devices as the pandemic-induced work-from-home trend continues.
The Taiwanese company, whose clients include technology majors such as Apple Inc (0:AAPL), booked July-September net profit of T$30.8 billion ($1.08 billion), Reuters calculations showed based on nine-month figures.
That compared with the T$28.61 billion average of 13 analyst estimates compiled by Refinitiv. Profit growth was nearly flat versus the T$30.7 billion of the same period a year prior.
Chief Financial Officer David Huang told an investor conference that third-quarter revenue fell 7% due to clients delaying product launches.
Still, Chairman Liu Young-way said Foxconn saw "stronger than expected" demand for both smartphones and servers, with strong shipments of Apple's new iPhone 12 supporting revenue.
Foxconn, formally Hon Hai Precision Industry Co Ltd, said it expected revenue to rise about 10% next year from this.
Consumer electronics, including smartphones, made up 41% of quarterly revenue, followed by devices for cloud computing at 28% and other computing products such as laptops at 24%.
Foxconn previously forecast weakness in its revenue-driving smartphone business in the quarter, but said work-from-home lifestyles being adopted worldwide would boost growth.
Underscoring weak demand, global smartphone shipments fell 1.3% from a year earlier, showed data from researcher IDC.
Revenue is likely to get a further boost in coming months from Apple's new iPhones, analysts said. Foxconn is likely to assemble all premium models and 70% of other models, said analysts, including those from Taipei-based Fubon Research.
Foxconn's share price ended trade 0.4% higher ahead of the earnings release, versus a 0.3% fall in the broader market (TWII). It has fallen about 10% so far this year.
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Written By: Reuters
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