Foxconn has reported its lowest Q1 profits in the last two decades. The COVID-19 pandemic has had an enormous impact on smartphone demand, and it seems that recovery could take a long time.
Foxconn’s Liu Young-way had some words regarding the company’s Q1 profits. These were down 90 percent on a year-on-year as a result of production shutdowns because of the coronavirus.
According to a report from Reuters:
“Foxconn’s first-quarter profit plunged to its lowest in two decades, all but wiped out, after the coronavirus pandemic forced the Taiwanese firm to suspend manufacturing operations in China and knocked demand from customers including Apple […]”
Hon Hai will stabilize in the second quarter,” Foxconn said in a statement, adding that all of its main factories in China have now resumed normal operations.”
Net profit for January-March slumped 90% to T$2.1 billion ($70.3 million) from a year earlier – the lowest level since the first quarter of 2000 and well short a Refinitiv consensus estimate of T$8.88 billion. Revenue declined 12%.
For the second-quarter, the company expects revenue will show double-digit growth from January-March although it will still likely mark a single-digit decline from the same period a year earlier.
The division is forecast to post a 15% yearly decline in sales as the virus is set to have “an enormous” impact on demand. In the first quarter, the division accounted for 42% of revenue.
“For consumer electronic products, because everyone is staying at home, naturally it affects consumers’ purchasing power and such power might take a very long time to recover.”
The second half of the year is still a mystery, but Liu expects growth in the computing division since lockdowns create demand for devices aimed at people who work from home and those looking for products that provide home entertainment.