Foxconn Profit Fell 2.5% in Second Quarter--Update

Date : 08/13/2019 @ 4:16PM
Source : Dow Jones News
Stock : Apple Inc (AAPL)
Quote : 206.5  4.76 (2.36%) @ 12:59AM

Foxconn Profit Fell 2.5% in Second Quarter--Update

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By Yoko Kubota 

BEIJING -- Foxconn Technology Group's net profit fell 2.5% in the second quarter, as its biggest customer, Apple Inc., continues to struggle with weak iPhone sales.

Taiwan-based Foxconn said Tuesday that its net profit in the April-to-June quarter was 17.05 billion New Taiwan Dollars (US$541.5 million), higher than the NT$15.97 billion average estimate of analysts polled by Factset. The company reported a net profit of NT$17.49 billion in the year-earlier period.

Its revenue for the quarter rose 7.4% to NT$1.16 trillion from the previous year's NT$1.08 trillion.

Foxconn, known formally as Hon Hai Precision Industry Co., is the world's largest contract electronics maker and assembles Apple's iPhones, among other products, mostly in China. It relies on Apple for about half of its revenue, according to analyst estimates.

Apple has been grappling with slowing iPhone sales as customers hold on to smartphones longer and competition increases from Chinese producers offering lower-price, feature-rich handsets.

During the three months ended June 29, Apple said its iPhone sales dropped 12%. For the first time since 2013, iPhone sales didn't account for the majority of Apple's quarterly revenue, according to eMarketer.

Apple offset the iPhone sales decline with revenue growth in every other area of its business, including iPads and Macs, which Foxconn also assembles.

The escalating trade war between Washington and Beijing has prompted Apple and Foxconn to consider shifting some production away from China. Cell-phones are among the Chinese goods that the Trump administration plans to hit with tariffs, but it is delaying the start date until Dec. 15 from Sept. 1.

Foxconn has undergone a leadership transition in recent months. Its founder, Terry Gou, stepped down as chairman to enter Taiwan's presidential race, seeking the nomination of the main opposition Nationalist Party, or Kuomintang. Mr. Guo ultimately lost his bid for the nomination.

In July, Young Liu, who had overseen Foxconn's semiconductor business, took over as chairman. The company also formed a new operations committee of nine executives to make key management decisions.

Foxconn doesn't hold earnings calls or briefings.

Shan Li contributed to this article.

Write to Yoko Kubota at yoko.kubota@wsj.com

 

(END) Dow Jones Newswires

August 13, 2019 11:01 ET (15:01 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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