Foxconn suffered a severe blow due to the coronavirus and all that ensued in terms of production closures and freezes. The difficulties facing the Taiwanese company had already emerged previously, but the economic context of the last few months has only aggravated the situation.
In the first quarter of the year the Minimum profit record of the past 20 years, with a 90% drop compared to last year ($ 70.2 million). And this, Foxconn, had foreseen it, so much so that right away he tried to anticipate the reopening of the production sites in the hope that the new orders from the customers – Apple and new iPhones above all – would return to give a certain balance to the company's books.
So the worst seems to be behind us: of course, market demand is still weak (just look at DigiTimes' forecasts to realize it), but new orders and the workforce returned to work between on-site production and smart working will help the Taiwanese company to reverse the trend of these last months, starting from the second quarter as said by Foxconn itself. Double-digit growth is expected in Q2 2020 compared to the January-March quarter, although this will not be enough to avoid a drop compared to April-June 2019.
The return to growth, however, will not see the contribution of the smartphone sector: the pandemic has caused a "huge impact on demand", and are expected throughout 2020 sales down 15%. This is certainly not a comforting figure for Foxconn, considering that 42% of its revenues come from the consumer products division.
Credits opening image: FT.com