Foxconn’s profits plunged almost 90%, due to COVID-19 shutdown

Foxconn’s profits plunged almost 90%, due to COVID-19 shutdown”

Foxconn already informed investors that the company doesn't expect to record profits and told them to brace.

The first-quarter results aren't surprising given that the company was forced to halt production at multiple of its facilities in China due to the COVID-19 outbreak.

Net profit for January-March slumped 90% to T$2.1 billion ($70.3 million) from a year earlier - the lowest level since the first quarter of 2000 and well short a Refinitiv consensus estimate of T$8.88 billion.

Shares of Foxconn (OTCMKTS: FXCOF) closed the day 1.2% in red after the tech firm said its first-quarter profit crashed almost 90% amid the COVID-19 outbreak. There will, nevertheless, proceed to be lower than optimum numbers, as smartphone gross sales are anticipated to proceed to decline or stagnate for a lot of corporations - driving down demand for Foxconn's companies.

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While demand for smartphones remains unclear, other business units are expected to see revenue growth of more than 10% in the second quarter from a year earlier thanks to rising demand from telecommuting and online entertainment, it added. "Right now, there is no way I can offer the outlook for the latter half of this year".

"Hon Hai will stabilize in the second quarter", Foxconn said in a statement, adding that it expects revenue will show double-digit growth in the second quarter from the first quarter.

The visibility of our outlook for the whole year is limited. Looking at the weekly chart, the price action looks like it wants to reverse its bullish trend as the buyers are struggling to extend the uptrend higher.

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