Apple supplier Foxconn’s Q1 profit up 5%, in line with market view

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TAIPEI (Reuters) – Apple Inc (NASDAQ:AAPL) supplier Foxconn reported a largely in line 5% rise in first-quarter profit as chip shortages, supply chain issues and slow spending for electronics amid COVID-19 lockdowns in China curbed demand.

The Taiwanese company, the world’s largest contract electronics maker, reported a 4% rise in first-quarter revenue and said it expected revenue for the second quarter to be flat as demand for consumer electronics including smartphones – its key growth driver – has stalled.

Foxconn expects revenue for 2022 to be flat. It did not provide a numerical outlook.

Net profit for the January-March quarter rose to T$29.45 billion ($985.48 million), compared with an average analyst estimate of T$29.76 billion, according to Refinitiv.

Foxconn, like other global manufacturers, has grappled with a severe shortage of chips that has squeezed smartphone production, and more recently with a downturn in major markets amid high inflation and the war in Ukraine.

While the company, formally called Hon Hai Precision Industry Co Ltd, has previously said that COVID-19 controls in China has only had a limited impact on its production, demand for its products in the country has suffered as people remain shut in.

Foxconn shares closed 1% lower ahead of the earnings release, versus a 2.4% drop in the broader market. They have fallen about 2% so far this year, giving the company a market value of $48.1 billion.

($1 = 29.8840 Taiwan dollars)