Apple supplier Foxconn’s first-quarter profit rose 5%, in line with the market view

By Yimou Lee and Ben Blanchard

TAIPEI (Reuters) – Apple supplier Foxconn reported a largely 5% increase in first-quarter profit as chip shortages, supply chain problems and slowing spending on electronics amid the COVID-19 lockdown in China curbed demand.

The Taiwanese company, the world’s largest contract electronics maker, reported a 4% increase in first-quarter revenue and said it expects revenue to stabilize for the second quarter as demand for consumer electronics including smartphones – its main growth driver – stalls.

Foxconn expects revenue for 2022 to remain flat. No numerical view is provided.

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

Foxconn, like other global manufacturers, has faced severe chip shortages that have curtailed smartphone production, and more recently with the downturn in key markets amid high inflation and the war in Ukraine.

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

Foxconn shares closed 1% lower before the earnings release, versus a 2.4% drop in the broader market. It’s down about 2% so far this year, giving the company a market value of $48.1 billion.

(1 dollar = 29.8840 Taiwan dollars)

(Reporting by Yimo Lee and Ben Blanchard in Taipei; Editing by Sayantani Ghosh and Muralikumar Anantharaman)