Foxconn’s profit climbs as COVID-19 sustains demand

Foxconn (TPE: 2354) said on Friday its net profit in the first quarter printed at £720 million. In the same quarter last year, its net profit was capped at a significantly lower £53 million due to the Coronavirus disruptions.

Foxconn shares opened 1.5% up in the stock market on Friday but closed the regular session about 2% down. Including the price action, the stock is now exchanging hands at £1.55 per share versus a year-to-date high of £1.99 per share in late January.

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In comparison, Foxconn had started the year at an even lower £1.41 per share. The price action should come in handy if you are interested in investing in the stock market.

Foxconn reports a 45% growth in its revenue

According to Refinitiv, experts had forecast a lower £620 million of net profit for Foxconn in the recent quarter. Officially known as Hon Hai Precision Industry, the Taiwanese multinational noted a 45% annualised growth in its revenue to a record £34 billion.

Compared to 2019 (pre-pandemic), Foxconn’s net profit and revenue in Q1 was up 42% and 28%, respectively. The Taipei-based company said it saw an over 15% increase in revenue from both of its primary segments – consumer electronics and computing products.

The world’s largest contract electronics manufacturer that assembles iPhones for Apple Inc. in China and India said that the impact of the ongoing global chip shortage had been limited so far. In March, Foxconn had posted a 12% decline in its full-year net profit.

Foxconn’s guidance for the second quarter

For the second quarter, Foxconn expects its revenue to climb by 15% as COVID-19 restrictions, and the associated work-from-home situation continues to fuel demand for consumer devices, including iPhones. Foxconn’s upbeat guidance reflects that of Apple Inc., who said in April that its current-quarter revenue will surge by strong double digits.

In related news, Foxconn signed an agreement with Fisker on Friday to build electric vehicles. On CNBC’s “Fast Money”, CEO Henrik Fisker of the car manufacturer said Foxconn’s plant in Southeastern Wisconsin is one of the primary locations that are being considered for production.

Foxconn performed fairly downbeat in the stock market last year with an annual decline of close to 20%. At the time of writing, the Taiwanese multinational contract electronics manufacturer has a market cap of £2.19 billion and has a price to earnings ratio of 18.33.