Apple supplier Foxconn sees Q4 revenue slumping up to 15% after

TAIPEI (Reuters) – Taiwan’s Foxconn, which assembles iPhones for Apple (NASDAQ:), reported a better-than-expected third-quarter profit on Friday, helped by strong smartphone demand as people continue to work remotely through the coronavirus pandemic.

But Foxconn, the world’s largest contract electronics maker, said it expects fourth-quarter revenue in its key consumer electronics business, which includes smartphones, to slump more than 15% from a year earlier, without offering a reason. It forecast overall revenue to fall between 3% and 15%.

Foxconn previously said it felt only a small impact from the year-long global chip shortage but had cautioned that rising COVID-19 cases in Asia could hurt its supply chain.

Third-quarter revenue rose 9% on the year, Foxconn said, reporting July-September net profit climbed 20% from a year ago to T$36.98 billion ($1.33 billion). That was above a Refinitiv consensus estimate of T$31.73 billion.

Analysts had said they expected robust iPhone sales boosted Foxconn’s business in the third quarter, and the company secured more than 75% of assembly orders, including those for the latest iPhone 13. But they cautioned that supply chain problems could mute any further near-term increase in orders at Foxconn.

Apple said last month that supply chain woes cost the company $6 billion in sales during the July-September quarter, and that the impact would worsen during the year-end holiday period.

“In the short term, Hon Hai’s iPhone 13 shipments will continue to be affected by the chipset shortage, something that Tim Cook also confirmed” on an Apple earnings call, Fubon Research wrote in a note dated Nov 8.

($1 = 27.8320 Taiwan dollars)