TAIPEI (Nov. 12): Taiwan’s Foxconn, which assembles iPhones for Apple, said on Friday it expected revenue from its key smartphone business to decline by more than 15% in the quarter ending in December, penalized by the current global shortage of components.
Speaking on a conference call after the world’s largest contract electronics maker reported a 20% profit increase for July-September, Chairman Liu Young-way said the company was cautious about its income outlook for 2022, citing uncertainties surrounding the coronavirus pandemic, inflation, geopolitical tensions, and supply chains.
“Without the supply shortages,” the company’s fourth quarter (4Q) revenue outlook could have been better, he said.
In addition to forecasting the decline in revenue from its consumer electronics business, which includes smartphones, Foxconn said he expected the company’s overall fourth-quarter revenue to fall by 3% to 15%. % during the period. Analysts predicted an 11% drop, according to a consensus estimate from Refinitiv.
Foxconn previously said it had only felt a small impact from the year-long global chip shortage, but warned that the increase in Covid-19 cases in Asia could hurt its supply chain .
The outlook came after a strong 3rd quarter, in which revenue grew 9% year-on-year, helped by strong demand for smartphones as people continue to work remotely during the coronavirus pandemic.
Net income jumped to T $ 36.98 billion ($ 1.33 billion), beating Refinitiv’s consensus estimate of T $ 31.73 billion.
Analysts had said they expected robust iPhone sales to boost Foxconn’s business in the third quarter, and the company secured more than 75% of assembly orders, including those for the latest iPhone 13. But they warned that supply chain issues could prevent any further short-term increases in orders at Foxconn.
Apple said last month that supply chain problems cost the company $ 6 billion in sales in the July-September quarter, and that the impact will worsen during the end of the holiday period. year.
“In the near term, Hon Hai’s iPhone 13 shipments will continue to be affected by the shortage of chipsets, which Tim Cook also confirmed” during a call for results from Apple, Fubon Research wrote in a report. note dated November 8.