Record Foxconn Profit Fall As Virus Guts Smartphone Demand

Taiwanese tech giant Foxconn said Friday its first-quarter profit slumped by nearly 90 percent on year as the global pandemic disrupted operations and hammered demand, especially for smartphones.

The results lay bare how the coronavirus is battering global supply chains and driven up costs for electronics makers.

Also known by its official name Hon Hai Precision Industry, Foxconn is the world's biggest contract electronics manufacturer and makes Apple's iPhones as well as gadgets for many other international brands.

In results published Friday net income for January-March dived a record 89 percent to Tw$2.1 billion ($70 million), while revenue fell 12 percent on-year to Tw$929 billion.

The group's total work hours had dropped by over 20 percent due to the outbreak, which also caused it estimated Tw$10 billion in additional costs, according to chief financial officer David Huang.

Foxconn employs more than one million workers across its vast network of factories in China, where operations have been affected by the deadly COVID-19 pandemic that emerged in central Wuhan before sweeping the globe.

Huang said operations in China have resumed ahead of schedule. The company had estimated normal seasonal capacity to be resumed by end of March.

Looking ahead, the company forecast second quarter revenue to rise by over 15 percent from the first three months but fall by single-digit year-on-year, chairman Young Liu told an investor conference.

"With the pandemic rapidly spreading, many countries have imposed restrictions while high jobless rates have impacted consumer demand," Liu said.

"However, remote working, online entertainment and new lifestyles have generated new drive for growth."