Apple supplier Foxconn ‘cautiously optimistic’ about Q4 outlook

Like other global manufacturers, the Taiwanese company, a major Apple Inc supplier, could be vulnerable to slowing consumer tech demand as the global economy faces the possibility of recession and inflation soars, especially in Europe and the United States.

But the company said in a statement it was “cautiously optimistic” about the outlook for the final three months of 2022, and maintained its full-year guidance of growth given in August, from previous guidance of flattish revenue.

“However, the dynamics of inflation, the pandemic, and the supply chain still need to be closely monitored,” it said.

Formally known as Hon Hai Precision Industry Co Ltd, the company said revenue for September and the third quarter grew 40.39% and 24.4% on the year, respectively, both hitting record highs and beating its own expectations.

Revenue from smart consumer electronics, which includes its key smartphone business, showed strong double-digit growth in the third quarter, thanks to new product launches and “smooth mass production”, it added.

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Apple’s new iPhone 14 went on sale last month.

The company, which has grappled with COVID-19 lockdowns and electricity rationing in China disrupting its supply chain, had previously forecast flat revenue growth for the third quarter for consumer electronics, including smartphones.

Revenue gained 13.66% in the first nine months of 2022, it said.

Analysts have said the popularity of new premium iPhones would boost Foxconn’s business, while continued server demand from major clients, including Amazon.com Inc, would also counter industry headwinds as global tech demand slows.

The fourth quarter is traditionally the hot season for Taiwan’s tech companies as they race to supply cellphones, tablets and other electronics for the year-end holiday period in Western markets.

Foxconn releases third-quarter earnings on Nov. 10.

Its shares closed up 1.5% on Tuesday, underperforming the benchmark index, which gained 2.1%. Foxconn shares have dropped 1.4% this year, giving it a market value of $44.03 billion.