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Foxconn’s Profit Plunges to a Record Two-Decade Low

Taiwanese major Foxconn’s first quarter profit nose dived to its lowest in the last two decades, thanks to the suspension of the organization’s manufacturing operations in China and low demand from various clients, including Apple, due to the COVID-19 situation.
However, Foxconn recently said in the statement, the worst of the virus outbreak for the company is over. New growth was to be found after the adaption of work-from-home lifestyle across the planet even if the outlook for smartphone and other consumer electronics’ demand remained bleak.
“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.
The net profit of January- March has seen a record drop of 90 percent to $70.3 million from a near earlier, which is the lowest level since the first quarter of 2000. Revenue declined as much as 12 percent.
On the other hand, the company expects revenue will show double digit percentage growth from the January and March period during the second quarter.
“Telecommuting, online entertainment and new lifestyles have brought us new growth momentum,” Foxconn Chairman Liu Young-way told an investor teleconference. He also added that its enterprise and computing units are expected to see a yearly revenue growth of more than 10 percent and more than 15 percent respectively in the current quarter. However, the consumer electronics division is an exception, much of which is consists of smartphones. The division will post a 15 percent yearly decline in sales as the virus is set to have “an enormous” impact on demand. In the first quarter, the consumer electronics division accounted for 42 percent 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,” he said.