Foxconn second-quarter results miss estimates ahead of product launches

Taiwan’s Foxconn, the world’s top contract electronics maker and an Apple supplier, posted surprisingly lower quarterly net profit on Monday, extending a downward streak to a second quarter in a row.

The tepid results from Foxconn, formally known as Hon Hai Precision Industry, underline a muddy outlook for sales in a plateauing global smartphone market ahead of the traditionally busy second half of the year when new products are launched.

Apple has projected above-consensus revenue for the northern hemisphere autumn, when it typically launches new iPhone models. Foxconn assembles electronic devices including iPhones for the world’s most valuable technology company.

For the quarter ended June, Foxconn reported a net profit of T$17.49 billion ($567.25 million), versus T$17.9 billion a year ago. This was below a mean estimate of T$21.936 billion ($711.45 million) from nine analysts polled by Thomson Reuters I/B/E/S. It did not elaborate on its earnings.

They come on the heels of a wider first-half loss at Foxconn unit FIH Mobile amid bleak demand from smartphone vendors. FIH acknowledged it faced a high risk of saturation in the smartphone market.

Apple too sold half a million less-than-expected iPhones in the fiscal third quarter ended June, but robust sales of costlier models like the $999 iPhone X helped push its results far beyond Wall Street targets for the period.

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