iPhone Assembler Foxconn Posts Near 90% Drop in First Quarter Profit

[MacRumors]

Apple's main iPhone assembler Foxconn posted an almost 90 percent drop in first-quarter profit on Friday, as the impact of the global health crisis hit production demand from clients (via Reuters).

But the Taiwanese electronics manufacturer said the worst was over, and the company would "stabilize in the second quarter," adding that it expects revenue to show double-digit growth in comparison to the first quarter.

Foxconn reported net profit of T$2.1 billion ($70.25 million) for the January-March quarter, falling well short of a Refinitiv consensus estimate of T$8.88 billion drawn from 14 analysts.

Foxconn slashed its 2020 revenue outlook in March after strict quarantines were enforced at its China plants for a period in February, at the height of the crisis, which has now largely resolved in the country.

Apple sold fewer than 500,000 iPhones amid the ongoing curbs on travel and transport - a 60 percent slump in ?iPhone? sales compared to the February 2019 quarter. The same month, Apple announced that its financial guidance for the March quarter would fall short. Foxconn went on to suffer its biggest monthly drop in revenue in about seven years because of the containment measures.

The manufacturer had earlier claimed the viral outbreak had had a "fairly small impact" on ??iPhone?? production, suggesting its factories in other countries like Vietnam, India, and Mexico had been able to fill the gap.

It and other factories in China have reportedly implemented stringent measures to prevent the another viral outbreak in the country, while the Chinese government is mandating that employers check temperatures and provide face masks to employees, as well as submitting daily reports on workers' health statuses.

Foxconn has since resumed normal operations at all of its main factories in China.

Article Link: iPhone Assembler Foxconn Posts Near 90% Drop in First Quarter Profit

 

[NBAasDOGG]

Now if we stop buying after the crisis, they might drop the prices.

Who knows...

 

[Morgenland]

Now if we stop buying after the crisis, they might drop the prices.

Who knows...

Nope, employers cannot work for free, just like you, they must be able to buy bread.

 

[NBAasDOGG]

Nope, employers cannot work for free, just like you, they must be able to buy bread.

For Apple to drop prices...
More people buy and Foxconn can assemble more iToys.

 

[TroyBoy30]

maybe you should look into making something else lol

 

[otternonsense]

Foxconn produces way more devices than just Apple's though. Their revenue outlook cannot just apply to Apple alone (I presume), and I wonder what the impact was on the entire Apple product family, from the iPhone to the iPad to the Mac. I recall reading, for instance, that iPad and Mac sales actually increased due to switching to work from home.

 

[dazzer21-2]

It will be interesting to see if this crisis enables Apple to maintain their current profit margins or whether something has to give. 16" MacBook Pro for the price of a MacBook Air in 6 months' time? 😂

 

[adamw]

Looks like we may get a discount on prices from Apple due to lack of demand and the uncertain economy. That would be great! Foxconn losing up to 90% of profit seems to indicate that China's Supply Chains are hurting.

 

[calzon65]

Sorry, but I just can't seem to shed a tear for Foxconn.

 

[meaning-matters]

Sorry, but I just can't seem to shed a tear for Foxconn.

You don't realise this might be a sign of economic downfall that may also hit you?

A bit further from home: You can't shed a tear for these hard working people that might be laid off?

 

[j-beda]

A 90% drop in profits still leaves 10% of the profits, after paying all of the expenses. $70.25 million profit is MUCH better than any size of loss, and this is just one quarter.

Maybe the headline should be "Even in a pandemic, Foxcom is still making money!"

 

[citysnaps]

It will be interesting to see if this crisis enables Apple to maintain their current profit margins or whether something has to give. 16" MacBook Pro for the price of a MacBook Air in 6 months' time? 😂

That would be close to erasing most of Apple's GPM. And thus little incentive to produce.

 

[gnasher729]

"Sold fewer than 500,000 iPhones" should be "sold fewer than 500,000 iPhones in March in China".
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Now if we stop buying after the crisis, they might drop the prices.

If you don't buy, it won't affect you. On the other hand, unless you are unemployed, maybe your company will want to lower wages.

 

[mi7chy]

Strange considering a ton of iPhone SE2 are being sold with the $200 offers.

 

[justperry]

A 90% drop in profits still leaves 10% of the profits, after paying all of the expenses. $70.25 million profit is MUCH better than any size of loss, and this is just one quarter.

Maybe the headline should be "Even in a pandemic, Foxcom is still making money!"

Exactly, they don't shed millions or even billions, this whole retarded financial speak should be banned.
A loss should be called a loss only when they are in the red, not if the profit goes from 100 million to 99 million.

 

[DeepIn2U]

I think Macrumors missed the news that Apple has engaged the iPod manufacturer to up it's game to make iPhones

Ouchie Foxconnn.

 

[rgbrock1]

In the above article, Macrumors uses the the two countries of "Taiwan" and "China" seemingly interchangeably. They are not. Far from it. So, are we talking about FOXCONN's factories in Taiwan or talking about other factors in China?

 

[calzon65]

Exactly, they don't shed millions or even billions, this whole retarded financial speak should be banned.
A loss should be called a loss only when they are in the red, not if the profit goes from 100 million to 99 million.

Well said ... and why I still can't shed a tear for poor Foxconn ... boo hoo they are only going to make a few hundred million dollars.

 

[ericwn]

For Apple to drop prices...
More people buy and Foxconn can assemble more iToys.

Ah I see we are at the “itoy “ level on comment 4 already. Sweet.

 

[Villarrealadrian]

Stop producing in china!! Why dont you just go produce in Mexico or some other place in America (The continent).

 

[dan110]

Trade war, anti-American products/services sentiment, and 'Rona Virus damage to the economy. Apple will have to adjust their business model or watch as growth stalls.

 

[I7guy]

Trade war, anti-American products/services sentiment, and 'Rona Virus damage to the economy. Apple will have to adjust their business model or watch as growth stalls.

I agree, but dang they just did $52B.