Apple supplier Foxconn forecasts flat sales in 2023 after reporting fourth-quarter profit miss
- Foxconn, the world’s largest electronics contract manufacturer, predicts a slump in consumer electronics demand this year
- The company on Wednesday reported fourth-quarter net income of US$1.3 billion, down 10 per cent from the same period in 2021
Taiwan-based Foxconn, the world’s largest electronics contract manufacturer, offered a forecast of slumping consumer electronics demand this year, offset by an uptick in expected sales of cloud and networking products, personal computers and other components.
The flattish full-year outlook is matched by the current quarter, which the company indicated is expected to be in line with market consensus. It reported net income of NT$40 billion (US$1.3 billion) for the last three months of 2022 on sales totalling NT$1.96 trillion.
That was down 10 per cent for the same period in 2021 and operating profit also slumped 16 per cent. Analysts had expected slightly higher profit, with a consensus average of NT$40.91 billion ahead of the company’s report on Wednesday.
Foxconn dealt with a coronavirus outbreak at its most important mainland Chinese plant in Zhengzhou, capital of central Henan province, during most of the fourth quarter.
Apple and other brands have struggled with tepid consumer spending during a post-pandemic economic downturn, which threatens Foxconn’s already thin margins.
China’s Henan assures Foxconn of comprehensive ‘services’ for iPhone production
Beyond Apple’s range of smartphones and Mac computers, Foxconn assembles high-end electronics for large and small customers and is vulnerable to slumps in consumer or enterprise demand. Demand for the iPhone has already slipped, with Foxconn reporting February sales were 12 per cent lower this year.
Foxconn and other Apple partners, including assembly peers Pegatron Corp and Wistron Corp, have been diversifying away from China amid persistent tensions between Beijing and Washington.