Apple Supplier Foxconn Reports a Profit Miss, Hints at Strong Demand for Apple's (AAPL) iPhone 12 Lineup

March 30, 2021 6:24 AM EDT
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Foxconn, a major supplier for Apple (NASDAQ: AAPL), announced today it earned T$45.97 billion ($1.61 billion) in the fourth quarter to end-December, a 4% drop compared to the year-ago period. Analysts were expecting the company to report earnings of T$50.89 billion ($1.79 billion).

Quarterly revenues surged 15% and the company said that strong demand for its services has continued in the current quarter. Foxconn expects revenue to grow about 10% on a year-to-year in 2021 amid strong demand for smartphones, headed by the iPhone 12 lineup.

When asked about the issues in the semiconductors supply chain, Chairman Young Liu said he expects these challenges to persist in 2022 as well.

“The impact of shortages in the first two months of the quarter have not been too obvious, because our customers are major companies. Still we are seeing some gradual changes and are monitoring the situation cautiously. Our expectations are that there won’t be a big impact, under 10%,” Young Liu, Chairman of the company, said on a conference call.

The smartphone sales now account for 63% of the total sales, Foxconn said. In addition to strong smartphone demand, the company also added it is experiencing high demand for work-from-home tech equipment. Earlier, Foxconn said it recorded best-ever monthly sales in February.

“Robust demand for high-end iPhone models and enduring work-from-home and remote-learning trends make consensus for 30% 1Q sales growth at Hon Hai appear conservative, we believe. Meanwhile, the delayed release of the iPhone 12 suggests monthly sales may remain in the double digits throughout 1H. The company reported surprisingly strong 84.8% sales growth in February, though vs. a low base in the prior year,” Bloomberg Intelligence analysts Charles Shum and Matthew Kanterman, said.

Foxconn stock price trades about 1% higher today in Taiwan.

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