Taiwan's Foxconn Posts Better-Than-Expected Second Quarter Profit

In a sign that the global tech scene has started looking bright amid the pandemic, Foxconn has announced better-than-expected quarterly profits. Foxconn, the world's largest contract electronics manufacturer, said profit stood at T$22.9 billion ($778.54 million) for the second quarter that ended in June.

The results come amid concerns over the impact of the coronavirus pandemic on industries. Foxconn's good showing signals that rising telecommuting demand amid the pandemic is offsetting slowing smartphone sales.

The profit was up about 34% from a year earlier according to Reuters calculations and better than a consensus estimate of T$17.95 billion drawn from 13 analysts polled by Refinitiv. Foxconn did not immediately provide any other details.

Foxconn Wikimedia Commons

The firm, formally called Hon Hai Precision Industry Co Ltd, had in May warned of bleak smartphone sales in the second quarter citing an "enormous" impact on demand due to the virus, but said the work-from-home lifestyles being adopted worldwide would offer new growth opportunities.

Researcher IDC said global smartphone shipments fell 16% from a year earlier in the second quarter. Analysts, however, expect Apple's new lineup of iPhones, set to be launched in the autumn, to boost Taipei-based Foxconn's revenue recovery in the months to come.

More than 70% of the new iPhones could be assembled by Foxconn, helping the firm's revenue resume growth in the fourth quarter, Taipei-based KGI Securities said.

Shares in the company closed 2% higher ahead of the results, versus a 0.9% fall for the broader market. Foxconn shares have lost more than 10% this year.

(With inputs from Reuters)

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