Foxconn Q4 revenue drops as smartphone sales slip

Foxconn, one of the leading iPhone suppliers to Apple, reported a 6 percent drop in revenue, its first in five quarters, hurt by a drop in sales of consumer products including smartphones.
Apple supplier FoxconnTaiwan-based Foxconn had predicted an up to 15 percent year-on-year fall in revenue for the fourth-quarter citing the impact of a year-long shortage of chips that has disrupted production at companies from Apple to GM.

Research report from IDC earlier stated that smartphone shipments fell 3.2 percent to 362.4 million units in Q4 2021. Apple’s iPhone shipment dropped 2.9 percent to 84.9 million in Q4 2021 as against 87.5 million in Q4 2020, IDC said.

In the fourth quarter, revenue from Foxconn’s key smart consumer and electronics products business that includes smartphones, fell between 3 percent to 15 percent, Foxconn said.

Revenue from its cloud and networking products as well as computing products was flat. Components revenue rose more than 15 percent.

Sales in the quarter were up against a high base in the year-ago period, analysts said, when demand for smartphones and personal gadgets had sky-rocketed as the coronavirus pandemic raged.

Foxconn Chairman Liu Young-way gave a cautious outlook in November for business this year due to uncertainties surrounding the pandemic, inflation, geopolitical tensions and supply chains.

On Wednesday, the company, which is formally called Hon Hai Precision Industry, said it expected revenue for the first quarter as well as the year to range between a 3 percent fall and a 3 percent rise.

Foxconn on Monday suspended operations in the Chinese city of Shenzhen to comply with the local government’s COVID-19 control policies and said it will deploy backup plants to reduce disruption to production.

Foxconn said on Wednesday some operations had been restored at its Shenzhen campuses, where the company had both housing and production facilities.

Foxconn’s net profit fell 3.4 percent to T$44.4 billion ($1.55 billion) in the October-December period.