Following Positive Q3 Revenue, Foxconn Predicts 15% Drop in Q4 Profits
Taiwan-based Apple supplier Foxconn reported higher-than-expected Q3 revenue on November 15. The reason behind it is the surging smartphone demand, partly due to the continued remote work mode throughout the world, as the coronavirus pandemic continues.
However, the largest contract electronics maker in the world, reports expectations of a Q4 revenue drop of 15% compared to Q4 2020 in its crucial consumer electronics segment, (smartphones included). The overall revenue is expected to slump between 3% and 15% for reasons that are not entirely clear.
In the past Foxconn stated that the year-long chip shortage that affected the entire world had little impact on its production numbers, but warned that the new wave of COVID-19 cases in Asia may negatively affect its supply chain.
Foxconn’t self-reported revenue rose 9% from a year ago in Q3, while July-September net profit increased by 20% on the year to TWD 36.98 billion. That exceeded the consensus estimate of TWD 31.73 billion made by Refinitiv.
Experts have claimed that iPhone sales improved Foxconn's business in Q3, with the company securing over 75% of phone assembly orders, cutting-edge iPhone 13 included. Supply chain problems, however, could damper any potential increase in Foxconn orders near-term.
Last month Apple claimed that supply chain troubles reduced company sales by $6 billion during Q3, and that the situation is likely to further deteriorate during the final quarter of 2021.Source