Coronavirus makes a big hole in Foxconn's February revenue
09 March 2020
Contract electronics manufacturer and Apple’s manufacturing partner Foxconn has reported an 18.1 per cent fall in February 2020 revenue, its biggest monthly drop in revenue in about seven years, hit hard by the coronavirus outbreak.
Taipei, Taiwan- based Hai Precision Industry (better known as Foxconn), the world’s largest contract manufacturer of mobile phones and other electronics products, saw its business plagued by the continuing threat of the fast spreading virus.
Foxconn’s revenue fell to T$217.5 billion ($7.28 billion) in February, as per a stock exchange filing.
The company had, earlier this week, warned that revenue would fall more than 15 per cent, pulled down by businesses such as consumer electronics and telecommunications products in the first quarter.
The company, however, said revenue would recover thereafter as production returns to normal in virus-hit China.
At 18.1 per cent February revenues saw the biggest monthly fall since March 2013 and the third straight monthly decline. Foxconn has warned that the coronavirus epidemic would hit its bottom line in the first quarter.
Foxconn is grappling with virus-related curbs that have disrupted supply chains and dampened demand.
The company said it did not expect to see any revenue growth in the first half and made a “mild downward revision” from its original guidance of “slight growth” for the year due to the coronavirus.
Foxconn has pledged to resume normal production in China, its top manufacturing base, by the end of March. But, with a slower ramp up of manufacturing in China amid travel restrictions and an extended Lunar New Year break, it looks uncertain.
Foxconn expects revenue to recover once production returns to normal in virus-hit China.
In a statement, issued last month, from Foxconn Technology Group sad the welfare of employees continues to be a top priority for Foxconn. “We have been closely monitoring the current public health challenge linked to the coronavirus and we are applying all recommended health and hygiene practices to all aspects of our operations in the affected markets,” the company had said.
“The operation schedules for our facilities in China follow the recommendations of the local governments, and we have not received any requests from our customers on the need to resume production earlier,” Foxconn said, adding, “As a matter of policy and for reasons of commercial sensitivity, we do not comment on our specific production facilities.”