Foxconn Full-Year Profits Drop 83%

Foxconn International Holdings - the mobile phone manufacturing division of Taiwan's giant Hon Hai Precision Industry has reported a net loss for the second half of last year, which dragged its full year profit down by 83.% to US$121 million - compared with US$721 million a year earlier.

The full-year result was worse than the mean estimate of US$260.51 million from 14 analysts polled by Thomson Reuters.

The company put the lower results down to a mix of lower demand, higher operating costs and currency fluctuations, along with higher income taxes.

Revenues in 2008 fell to US$9.27 billion from US$10.73 billion - down 13.6%.

In a statement, the firm said "2008 was a traumatic year for global economy and industries. The financial tsunami originated from Wall Street had rapidly swept through all regions and created a sudden freeze in global consumption and widely-spread loss of individual wealth. Badly shaken consumer confidence worldwide had transformed the market place into a world of uncertainty and economic contraction."

"Aside from the financial tsunami of 2008, global handset OEM markets were marked by continued industry consolidation and 3C (computer, communication and consumer electronics) convergence pressure resulted from entry of new players. Poor visibility in global consumer demand and severe competition led to handset OEMs' ever increasing needs for further cost-down and supply chain restructuring,"

Foxconn is the largest manufacturer of electronics and computer components worldwide, and mainly manufactures on contract to other companies. Among other things, Foxconn produces the Mac mini, the iPod and the iPhone for Apple Computer; Intel-branded motherboards for Intel; various orders for American computer retailers Dell, and Hewlett Packard; the PlayStation 2 and PlayStation 3 for Sony; the Wii for Nintendo; the Xbox 360 for Microsoft, cell phones for Motorola, and Amazon Kindle.

Posted to the site on 9th March 2009