Apple Supplier Foxconn Expects Flat Fourth Quarter Despite iPhone Factory Shutdown: What Does This Mean For Cupertino?
Apple Inc.'s AAPL supplier Hon Hai Precision Manufacturing Company Limited HNHPF, popularly known as Foxconn, reported higher third-quarter revenue on Thursday, but earnings growth slowed amid a declining margin.
What happened: Taiwanese contractor Foxconn posted third-quarter revenue of NT$1.747 trillion ($54.96 billion), representing 24% year-over-year growth and 16% sequential growth.
Earnings grew only 5% year-over-year to NT$38.76 billion or NT$2.80 per share, albeit sequentially, growth was 16% higher. The profit was lower than the average estimate of NT$41.3 billion, Reuters said, citing Refinitiv data.
See also: Apple shares could tumble as situation in China delivers "absolute punch" - Analysts report a buying opportunity
The slowdown reflects slower gross profit growth relative to revenue growth. Additionally, non-operating revenue fell 77% year-on-year, but increased 9% from the prior quarter.
The company noted that just over half of total revenue came from smart consumer electronics, about a quarter from cloud and networking products, 19% computer products and 5% of components and other products.
What's next: Foxconn pointed to flat fourth-quarter revenue from the year-ago period, though it didn't give a hard-line outlook. This expectation comes as no surprise as the company's main iPhone assembly plant in Zhengzhou is operating under restrictions following the new resurgence of COVID-19 in China.
This facility would employ 200,000 people and be the largest iPhone factory in the world. As Foxconn continued to operate the plant under harsh conditions, disgruntled employees reportedly fled the site.
Foxconn said Monday it will revise its fourth-quarter outlook downward, even as it works to bring full production back online.
Incidentally, Apple revealed earlier this week a temporary impact of COVID-19 restrictions on the iPhone 14 Pro and iPhone 14 Pro main assembly plant Max in Zhengzhou.
Price Action: U.S.-traded Hon Hai shares rose 1.13% to $6.26, according to data from Benzinga Pro.
Read Next: How to Buy Foxconn Stock in the US
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Apple Inc.'s AAPL supplier Hon Hai Precision Manufacturing Company Limited HNHPF, popularly known as Foxconn, reported higher third-quarter revenue on Thursday, but earnings growth slowed amid a declining margin.
What happened: Taiwanese contractor Foxconn posted third-quarter revenue of NT$1.747 trillion ($54.96 billion), representing 24% year-over-year growth and 16% sequential growth.
Earnings grew only 5% year-over-year to NT$38.76 billion or NT$2.80 per share, albeit sequentially, growth was 16% higher. The profit was lower than the average estimate of NT$41.3 billion, Reuters said, citing Refinitiv data.
See also: Apple shares could tumble as situation in China delivers "absolute punch" - Analysts report a buying opportunity
The slowdown reflects slower gross profit growth relative to revenue growth. Additionally, non-operating revenue fell 77% year-on-year, but increased 9% from the prior quarter.
The company noted that just over half of total revenue came from smart consumer electronics, about a quarter from cloud and networking products, 19% computer products and 5% of components and other products.
What's next: Foxconn pointed to flat fourth-quarter revenue from the year-ago period, though it didn't give a hard-line outlook. This expectation comes as no surprise as the company's main iPhone assembly plant in Zhengzhou is operating under restrictions following the new resurgence of COVID-19 in China.
This facility would employ 200,000 people and be the largest iPhone factory in the world. As Foxconn continued to operate the plant under harsh conditions, disgruntled employees reportedly fled the site.
Foxconn said Monday it will revise its fourth-quarter outlook downward, even as it works to bring full production back online.
Incidentally, Apple revealed earlier this week a temporary impact of COVID-19 restrictions on the iPhone 14 Pro and iPhone 14 Pro main assembly plant Max in Zhengzhou.
Price Action: U.S.-traded Hon Hai shares rose 1.13% to $6.26, according to data from Benzinga Pro.
Read Next: How to Buy Foxconn Stock in the US
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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