Electronics Manufacturer Foxconn Reports Third Year Of Falling Profits
Hon Hai Precision Industry, more commonly known as Foxconn, reported that its net profits fell for the third consecutive year in 2019, declining by 10.7% to hit NT$115.3 billion (AUD$6.2 billion). This marks the company’s lowest net profits in roughly six years.
Foxconn is one of the largest electronics manufacturers in the world, supplying products for Apple, Blackberry, Amazon and Xbox. According to a New York Times article published last year, Foxconn produces approximately 40% of the world’s consumer electronics and receives around half of its income from Apple.
Although revenue increased slightly in 2019, by 0.9%, the manufacturer’s gross margin hit 5.9%.
In the last quarter of 2019, before the COVID-19 crisis picked up, net income fell by roughly 23%, according to Bloomberg News figures.
Like many others in the electronics consumer goods industry, Foxconn will undoubtedly be affected by the COVID-19 pandemic.
According to Taipei Times, Hon Hai Industry’s Chairman Young Liu forecast that its sales in the first quarter of 2020 would drop by 15%. However, Liu said that production was set to be back on track in the second quarter and that the company’s revenue growth in 2020 was expected to range 2-3%.