Foxconn, Apple Contractor, Shares Plunge On Protests, Lower Earnings Call

Shares of Hon Hai Precision Industries (TPE: 2317), more widely known as Foxconn and as the main contractor for Apple (Nasdaq: AAPL), the world's most valuable technology company, plunged Friday.

Shares of Apple also fell as much as $7.50 to $600.50 before inching back to $603, down $4.70 or less than 1 percent, by the close,

One reason for the decline was that the Taiwan-based manufacturer reported an employee protest at a plant in Wuhan China, a month after the company agreed with the Fair Labor Association to improve working conditions.

In addition, Hon Hai estimated that its losses for the first half of the year will widen significantly above last year's $17.7 million, in a filing with the Hong Kong Stock Exchange.

Hon Hai's Foxconn (HK: 2038) shares plunged 16 percent to HK $3.78 (US 49 cents), its lowest price in three years.

In Wuhan, workers threatened to jump off the roof of a factory that makes the Apple iPhone and iPad in a protest over low wages, the Hong Kong-based Information Center for Human Rights reported. Police intervened without violence.

After extensive complaints from unions and activists about alleged slave labor conditions, as well as suicides, Apple CEO Timothy D. Cook hired the industry-backed Fair Labor Association to investigate conditions at Foxconn plants that employ as many as 1.2 million Chinese workers. The group didn't find abusive conditions there but it did report problems with overtime and overwork. The company agreed to remedy those issues.

After Apple, in Cupertino, Calif., announced record-breaking first-quarter results on Tuesday, Cook said that investor demand for some products like the iPad was supply constrained, but he wasn't asked about Foxconn and its working conditions.

Apple reported China revenue was a record $7.9 billion, or 20 percent of overall revenue, triple the year-earlier amount.