Foxconn earnings for March were reported today, and revenue for the iPhone assembler shows a year-on-year fall of 21.1%.
The company says that it also expects a decline during the current quarter …
Background
Foxconn is best known as Apple’s primary iPhone assembler, with around half of the company’s revenue coming from the Cupertino company. Its earnings reports and guidance can thus give an early steer on how Apple is doing, as the Taiwanese company reports monthly as well as quarterly.
Additionally, Foxconn continues to offer guidance on upcoming quarters, while Apple has ceased doing so.
However, it should also be noted that Foxconn is the world’s largest contract manufacturer, providing production and assembly services to other tech companies also, so its financial health is not solely tied to Apple.
Foxconn earnings for March 2023
There was some good news in the mix. The first quarter of the year as a whole saw revenue rise 3.9% year-on-year. However, that reflected growth in January and February due to easing supply constraints. As Reuters reports, there was a substantial fall in March, of more than 20%.
The company is also pessimistic about the current quarter, running from April to June, expecting a further year-on-year decline.
Foxconn made the same observation about its business as Apple CEO Tim Cook did about Mac revenue: 2021 made for a tricky compare. The company said that there was unusually high production in the first half of last year, due to pent-up demand created by the worldwide components shortage. That saw sales pushed forward from the holiday quarter and earlier.
iPhone 14 Pro impact
This phenomenon of sales being pushed into January was especially true of the two iPhone 14 Pro models.
Production was very badly hit by a COVID-19 outbreak in the world’s largest iPhone assembly plant, in Zhengzhou, China. Colloquially known as iPhone City, the plant is estimated to produce around 80% of the global iPhone supply.
The subsequent mess over pay and bonuses saw more than 20,000 workers leave.
The combination of limited production and high Christmas demand meant that many orders were significantly delayed, hence a strong January and February.
Foxconn is currently working on greatly increased iPhone production in India.
Photo: Maxim Hopman/Unsplash
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