Shares in one of
Apple’s
most important suppliers tumbled Wednesday after
Foxconn Technology,
the world’s largest contract electronics manufacturer, revealed a plunge in revenue last month amid weakness in the smartphone segment.
Foxconn
(ticker: 2354.Taiwan) stock dropped 1.8% in Taipei trading on Wednesday after the company reported revenue in June of 422.8 billion New Taiwan dollars ($13.6 billion), a drop of 6.2% month over month and 19.7% year over year.
The group is a giant of electronics manufacturing, making devices like
Apple’s
(AAPL) iPhone on contract and
Sony’s
(SONY) PlayStation.
The latest batch of monthly revenue caps out a dreary quarter, with revenue in the three months to the end of June coming in at NT$ 1,302.7 billion, down 10.9% quarter over quarter and 13.8% from a year earlier.
June saw strength in computing products, Foxconn said, which delivered double-digit growth. But components stagnated and cloud and networking products, as well as smart consumer electronics—which includes smartphones like the iPhone—declined.
Shares in Apple shed 0.7% in premarket trading on Wednesday as investors returned from the July Fourth holiday. Futures tracking the technology-heavy
Nasdaq
were down 0.6%. Apple’s quarterly profits tend to live and die on iPhone sales, and Foxconn’s results could offer a sneak peak into market trends for the tech giant’s flagship product.
But there remains reason for optimism.
“Operations will gradually ramp up” with the second half of the year’s peak season currently underway, Foxconn said in its outlook, guiding for the third quarter to be better than the second and seeing an on-quarter growth at its best in two years.
Write to Jack Denton at [email protected]
Read the full article here
