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Foxconn Reports Better-Than-Expected Q3 Profits

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Foxconn reported a better-than-expected third-quarter profit on Friday, helped by strong smartphone demand as people continue to work remotely through the coronavirus pandemic.

Taiwan’s Foxconn, which assembles iPhones for Apple, said on Friday it expected revenue from its key smartphone business to slide more than 15 percent in the quarter ending December, hurt by the ongoing global shortage of components, explains Reuters.

The company previously said it felt only a small impact from the year-long global chip shortage but had cautioned that rising COVID-19 cases in Asia could hurt its supply chain.

“Given the on-and-off COVID situation globally, we expect the component shortage will extend to at least the second half of next year, which is longer than our previous estimate of till the first half of 2022,” Foxconn Chairman Young Liu told investors.

“Our revenue performance for this year was better than our previous expectation, which will be a higher comparison base for next year. We will be rather cautious about the next year’s outlook,” Liu said. “COVID and inflation are two very major factors to influence [the global economy], and it’s still hard to predict.”

Liu said for the final quarter of 2021, revenue for consumer electronics, as well as computing products, could decline from a year ago due to the component shortage and a relatively high base in the same period last year. Revenue for cloud server and networking products could be flat compared with a year ago, while the company’s component business may still see growth for the October to December period, the chairman added. Foxconn’s cloud and networking business will be the company’s most important growth driver next year, he added.

Foxconn reported record earnings for the July to September period on Friday despite the global chip crunch. Its net profit surged 20 percent on the year to 36.9 billion New Taiwan dollars ($1.32 billion USD). In the first three quarters of this year, Foxconn’s net profit climbed 70 percent on the year to a record NT$94.92 billion.

Foxconn is the largest Apple supplier, but it also counts Google, HP, Facebook, Microsoft, Amazon and Cisco as its clients. The company provides product assembly and components for everything from smartphones, tablets and smartwatches to PCs, servers and cars.

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