Apple supplier Foxconn records 5% rise in Q3 profit, sees flattish Q4

Apple Inc supplier and iPhone assembler Foxconn said on Thursday it expected flattish revenue in the fourth quarter, as the company grapples with COVID-19 curbs at a major factory in China’s Zhengzhou industrial hub.

Apple expects lower shipments of its high-end iPhone 14 models than previously anticipated following a significant production cut at the virus-blighted plant in China, dampening its sales outlook for the year-end holiday season.

The Taiwanese company, the world’s largest contract electronics maker which is formally called Hon Hai Precision Industry Co Ltd, said net profit for the July-September quarter rose 5% to T$38.8 billion from T$36.98 billion a year earlier.

Eleven analysts were expecting on average profit of T$41.3 billion, according to Refinitiv.

Reuters last month reported that Foxconn’s production of Apple’s iPhones at the Zhengzhou factory could slump by as much as 30% in November due to tight COVID-19 restrictions.

Foxconn’s main Zhengzhou factory in central China, which employs about 200,000 people and is the world’s largest iPhone plant, has been rocked by discontent over stringent measures to curb the spread of COVID-19, with many workers fleeing the site.

Apple, which launched sales of the new iPhones in September, said customers will experience longer wait times to receive their new products.

Foxconn said on Monday it was working to resume full production at the plant as soon as possible. On Wednesday it said it would continue production in Zhengzhou under a “closed loop” system, where staff live and work on-site in a bubble isolated from the wider world..

Foxconn is Apple’s biggest iPhone maker, accounting for 70% of iPhone shipments globally. It has other smaller production sites in India and southern China.

Having said on Monday it would “revise down” its fourth quarter outlook given the situation in Zhengzhou, Foxconn said revenue in the final three months of this year would be flattish.

It did not provide a numerical outlook.

The fourth quarter is traditionally the hot season for Taiwan’s tech companies as they race to supply cellphones, tablets and other electronics for the busy year-end holiday period in Western markets.