The Taiwanese firm, the world's largest contract electronics
maker booked an October-December net profit of TWD 45.97 billion, a 4 percent
decline from a year earlier, and compared with the TWD 50.89 billion average of
11 analyst estimates compiled by Refinitiv.
Chief Financial Officer David Huang said the company's gross
margin was hit by the COVID-19 pandemic but strong smartphone sales still
contributed to stronger-than-expected performance in the fourth quarter, though
he did not elaborate.
Formally called Hon Hai Precision Industry, Foxconn's
fourth-quarter revenue rose 15 percent on the year.
That was mainly driven by a more than 15 percent revenue
increase on the year from consumer electronics including smartphones, which
accounted for 63 percent of its business in the quarter, Foxconn said.
The company had previously forecast fourth-quarter revenue
to be in a range of a decline of 3 percent and gain of 3 percent from a year
earlier.
Chairman Liu Young-way said he expected first-quarter
revenue to be "better than normal" for the season thanks to strong
sales of smartphones and telecommuting devices amid a coronavirus-induced
work-from-home trend.
Liu, however, said the company is closely monitoring
"materials shortages" in the consumer electronics supply chain and
that could hit less than 10 percent of client orders, though described the
impact as limited.
"The pandemic and the materials shortage could impact
our performance going forward. That's why we are being cautious," he said,
adding that he expected the shortage to continue until next year.
While Liu did not give specifics on the shortage, industry
sources have said a chip shortage that first hit the auto industry is now
spreading across the electronics business including smartphones.
Foxconn had previously said it expected revenue to grow
about 10 percent in 2021.
Liu said Foxconn was in talks with "related
foundries" on possible collaboration to make chips for electric vehicles
(EV), touting the company's little-noticed strength in speciality chips
manufacturing. He gave no details.
The company has in recent months announced plans to become a
major player in the global EV market.
Shares of Foxconn have climbed almost 41 percent this year.
They ended up 0.78 percent on Tuesday, compared with a 0.48 percent rise in the
broader market.
© Reuters
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