Foxconn Profit Down Amid US Trade War
Taiwanese component assembly giant, Foxconn, has post its third straight quarterly loss, with the iPhone manufacturer grappling with strained US trade tensions.
The world’s largest contract electronics manufacturer claims heightened trade tensions have increased expenses and impaired earnings.
For the April to June quarter, net profit dipped 2.5% to NT$17.05 billion – its lowest quarterly result since Q3Y13.
Increased smartphone orders from the likes of Huawei helped lift quarterly revenue 7.44% YoY, however, gross margin slipped 5.31% and operating margin dipped 1.34%.
Foxconn’s Android-smartphone assembly business, FIH Mobile, has also benefit from increased Huawei orders after Singapore-based Flex temporarily suspended shipments to the Chinese brand amid US trade bans.
Assembly of Apple iPhones currently represents around half of Foxconn’s revenue, with the US-China trade war still tipped to offer potential concern.
The Trump administration is considering a 10% tariff on Chinese imports worth US$300 billion, however, the fee on certain goods (e.g. mobile phones) is delayed until mid-December.
“If Apple has any supply chain diversification plans outside China, we have sufficient capacity to help it cope with its need for the U.S. market,” said Foxconn Chairman and CEO, Young Liu, in the company’s first-ever investors conference mid-June.
Apple is tipped to unveil its 2019 iPhone range in September, with analysts hoping for a sales lift.