Hon Hai’s first-quarter net profit of T$2.1 billion is down 89% from a year earlier

Beijing time on the afternoon of May 15, according to Bloomberg reported that Hon Hai Precision Industry recently released the company’s quarterly financial results. As previous outbreaks disrupted production in China and restrictions curbed global demand for smartphones, net income fell as much as 89 per cent to T$2.1bn ($70m) in the first three months of 2020, the biggest drop in profits in the company’s history. Revenue fell nearly 12 percent to T$929.7 billion, according to sales data based on previous earnings reports.

Hon Hai's first-quarter net profit of T$2.1 billion is down 89% from a year earlier

The Taiwanese company is well known as Foxconn. Half of the company’s revenue comes from making iPhones and other devices for Apple in China. Although the company’s main manufacturing plant resumed operations in mid-March, a sharp drop in global smartphone shipments in the first quarter hit the company’s sales hard.

To contain the outbreak, many of Apple’s partners in Asia have opted to suspend production, leading to severe equipment shipment delays and component supply bottlenecks. Consumers are closing their doors, also affecting retail. At one point, Apple closed 42 retail stores in China, and then closed stores in other countries. Although retail stores in China are now back on business, they are still not back to normal in many other countries.

The outbreak has also delayed the development and launch of products. Apple is expected to unveil four new iPhones that support 5G technology a few weeks later than usual. In May, for the first time in more than a decade, Apple failed to provide its earnings forecast.

Foxconn has cut its revenue forecast for 2020 after the outbreak. The company told investors in April that while it still had time to help Apple launch its new iPhone in time for the holiday season, that could change if the outbreak continues. (Tur)