Apple supplier Foxconn’s Q1 profit up 5%, in line with market view

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Apple supplier Foxconn’s Q1 profit up 5%, in line with market view

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A shovel and FoxConn logo are seen before the arrival of U.S. President Donald Trump as he participates in the Foxconn Technology Group groundbreaking ceremony for its LCD manufacturing campus, in Mount Pleasant, Wisconsin, U.S., June 28, 2018. REUTERS/Darren Hauck/Files

TAIPEI, May 12 (Reuters) – Apple Inc (AAPL.O) supplier Foxconn (2317.TW) reported a largely in line 5% rise in first-quarter profit as chip shortages, supply chain issues and slow spending for electronics amid COVID-19 lockdowns in China curbed demand.

The Taiwanese company, the world’s largest contract electronics maker, reported a 4% rise in first-quarter revenue and said it expected revenue for the second quarter to be flat as demand for consumer electronics including smartphones – its key growth driver – has stalled.

Foxconn expects revenue for 2022 to be flat. It did not provide a numerical outlook.

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

Foxconn, like other global manufacturers, has grappled with a severe shortage of chips that has squeezed smartphone production, and more recently with a downturn in major markets amid high inflation and the war in Ukraine.

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

Foxconn shares closed 1% lower ahead of the earnings release, versus a 2.4% drop in the broader market (.TWII). They have fallen about 2% so far this year, giving the company a market value of $48.1 billion.

($1 = 29.8840 Taiwan dollars)

Reporting by Yimou Lee and Ben Blanchard in Taipei; Editing by Sayantani Ghosh and Muralikumar Anantharaman

Our Standards: The Thomson Reuters Trust Principles.