Business

Foxconn profit leaps as COVID-19 drives demand for work-from-home devices

Taiwan's Foxconn, which assembles iPhones for Apple, on Friday reported better-than-expected first-quarter profit amid the work-from-home trend spurred by the COVID-19 pandemic that has stoked demand for electronic devices.

FILE PHOTO: A sign of Foxconn is seen inside its office building in Taipei
FILE PHOTO: A sign of Foxconn is seen inside its office building in Taipei, Taiwan November 12, 2020. REUTERS/Ann Wang
(Updated: )

Bookmark

TAIPEI -Taiwan's Foxconn, which assembles iPhones for Apple, reported first-quarter profit soared past estimates amid the work-from-home boom spurred by the COVID-19 pandemic that has stoked demand for devices like smartphones and laptops.

The world's biggest contract electronics maker also said it sees growth continuing in the second quarter, expecting revenue for consumer electronics and computing products to both rise more than 15per cent on the year, extending first-quarter sales growth.

Officially known as Hon Hai Precision Industry Co, the firm January-March net profit rocketed to TUS$28.2 billion (US$1 billion) from TUS$2.1 billion a year earlier, when the company's business was badly hit by the early outbreak of the COVID-19 pandemic

The result, a 13-fold jump, was well above an average forecast of TUS$24.41 billion compiled from 11 analysts' estimates by Refinitiv.

Foxconn said sales from its major revenue contributor - consumer electronics including smartphones and wearable devices - climbed more than 15per cent in the first quarter from a year earlier, while computing products such as laptops also rose more than 15per cent.

First-quarter revenue rose 45per cent from a year earlier to TUS$1.34 trillion, the company said.

The company had previously expected first-quarter revenue to be "better than normal" for the season thanks to strong sales of smartphones and telecommuting devices. Foxconn, however, has said it was closely monitoring "materials shortages" in the consumer electronics supply chain, amid a crunch in semiconductor supplies that has hit the auto industry, though described the impact as "limited". It assembles iPhones at plants in China and India, the latter now ravaged by the spread of the coronavirus. Foxconn's shares have risen 14per cent this year. They ended up 1.5per cent on Friday, compared with a 1per cent rise for the broader market.

(US$1 = 27.9500 Taiwan dollars)

(Reporting by Yimou Lee and Ben Blanchard; Editing by Kenneth Maxwell)

Source: Reuters