foxconn: Apple supplier Foxconn warns of consumer electronics demand due to falling fourth-quarter earnings

apple Inc supplier Foxconn said on Wednesday that demand for smart consumer electronics is expected to ease slightly this year as it reported a 10 percent drop in fourth-quarter net income from a year earlier, in line with analyst estimates.

The world’s largest contract electronics manufacturer, which derives more than half of its revenue from consumer electronics, is forecasting strong growth this year in other areas such as computing, cloud and networking, and components.

Overall, first-quarter and full-year revenue should remain flat, the Taiwanese company said.

“We maintain a relatively conservative view of smart consumer electronics and think they may be down slightly,” Foxconn chairman Liu Yang-wei said during an earnings call, pointing to factors such as last year’s strong base and Also inflation and a slowdown in the global economy.

Foxconn made headlines in November as curbs were controlled COVID-19 prompted thousands of workers to leave his huge factory in the Chinese city of Zhengzhou, which is also the largest in the world. iPhone plant This disrupted production on the eve of Christmas and the January New Year holidays according to the lunar calendar.

Net income for the October-December quarter fell to 40 billion tenge ($1.31 billion) from 44.4 billion tenge in the same period last year, the company said. This is in line with the average earnings forecast of NT$39.98 billion made by 13 analysts, according to Refinitiv.

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In the fourth quarter, revenue from its key consumer electronics division was unchanged from last year, the company said in a statement without clarification. The company previously said production had returned to normal in Zhengzhou, where most of Apple’s premium models are made, including the iPhone 14 Pro.

Apple forecast last month that its revenue would fall for the second quarter in a row, but iPhone sales were likely to pick up as production in China returned to normal after a COVID-related shutdown.

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