Apple Inc. AAPL supplier Hon Hai Precision Manufacturing Company Limited HNHPF, popularly known as Foxconn, reported on Thursday higher third-quarter revenue but profit growth slowed amid shrinking margin.
What Happened: Taiwanese contract manufacturer Foxconn reported third-quarter revenue of NT $1.747 trillion ($54.96 billion), which represented 24% year-over-year growth and 16% sequential growth.
Earnings rose merely 5% year-over-year to NT $38.76 billion or NT $2.80 per share, although sequentially, the growth was a steeper 16%. The profit trailed the average estimate of NT $41.3 billion, Reuters said, citing Refinitiv data.
The slowdown reflected slower growth in gross profit relative to topline growth. Additionally, non-operating income fell 77% year-over-year but rose 9% from the previous quarter.
The company noted that a little over half of the total revenue came from smart consumer electronics products, about a quarter from cloud and networking products, 19% from computing products and 5% from components and other products.
What’s Next: Foxconn guided to flat revenue for the fourth quarter relative to the year-ago period, although it did not give a numerical outlook. The expectation does not come as a surprise as the company’s main iPhone assembly plant in Zhengzhou operates under restrictions following renewed COVID-19 resurgence in China.
This facility reportedly employs 200,000 people and is the world’s largest iPhone factory. As Foxconn continued to run the factory under tough conditions, disgruntled employees reportedly were fleeing the site.
Foxconn said on Monday that it would revise down its fourth-quarter outlook even as it is striving to bring back full production online.
Incidentally, Apple disclosed earlier this week a temporary impact from the COVID-19 restrictions at the main iPhone 14 Pro and iPhone 14 Pro Max assembly facility in Zhengzhou.
Price Action: Hon Hai shares traded over the counter in the U.S. settled Wednesday’s session 1.13% higher at $6.26, according to Benzinga Pro data.
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Image and article originally from www.benzinga.com. Read the original article here.