Foxconn reports fall in Feb sales, sticks to Q1 outlook

Revenue last month still managed to reach the second highest on record for February at T$402.0 billion ($13.18 billion), with operations returning to normal at the COVID-disrupted Zhengzhou campus in China, a centre for iPhone production, the company said in a statement.

Production of iPhones faced disruption ahead of Christmas and January’s Lunar New Year holidays, after curbs to control COVID-19 prompted thousands of workers to leave Foxconn’s factory lines in Zhengzhou.

Compared to the previous month, revenue dropped 39.12%, although cumulative sales for the first two months of the year jumped on-year 17.94% thanks to January’s particularly strong performance when Zhengzhou operations began getting back on track.

For smart consumer electronics products, which includes smartphones, revenue in February fell year-on-year “due to conservative customers’ pull-in”, it said, without giving details.

Analysts say Foxconn assembles around 70% of iPhones. The Zhengzhou plant produces the majority of Apple’s premium models, including the iPhone 14 Pro.

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“Based on the revenue performance in the first two months, the outlook for first quarter 2023 is roughly in line with market expectation,” Foxconn said without elaborating. Analysts expect first-quarter revenue to grow by around 4% year-on-year, according to Refinitiv. The first quarter is traditionally a quieter period for Taiwan’s tech manufacturers.

Apple Inc last month forecast its revenue would fall for a second quarter in a row but that iPhone sales were likely to improve as production had returned to normal in China after the COVID-related shutdowns.

Foxconn shares have risen 2.6% so far this year, underperforming the broader Taiwan market which is up 10.4%.

The company reports fourth-quarter earnings on March 15, when it will also elaborate on its outlook.