Company posts $2.5 billion net income in Q4

Apr 2, 2018 09:08 GMT  ·  By

Apple’s iPhone X is believed to be selling well below expectations, and in addition to the parent company, which is the first one suffering from the poor demand, suppliers are also reporting lower revenues and profit.

Hon Hai Precision Industry Co., more often referred to as Foxconn, has revealed a net income of $2.5 billion for the fourth quarter of 2017 ending in December, and data shows that this time, it wasn’t Apple the one that contributed to this figure.

In fact, Bloomberg notes citing financial analysts that this could have been the company’s worst holiday quarter since 2010 “were it not for a one-time gain of $2.2-billion from the sale of Sharp shares.”

On the good side, Foxconn expected $2 billion net income for the quarter, so the company did exceed expectations, but without the Sharp sale, Q4 would have become the company’s lowest fourth-quarter in seven years.

Slow iPhone X demand

Foxconn, which is the biggest Apple supplier, gets more than half of its money from the Cupertino-based tech giant, and the slow demand for the iPhone X is what caused particular trouble for the company.

The iPhone X launched last year with a delay believed to be caused by the complex nature of some parts, such as the Face ID module that powers the facial recognition feature. Announced in September, the iPhone X went on sale in early November with constrained supply, and inventory issues were only resolved in late December.

While the iPhone X is now available for walk-in customers as well, demand is said to remain weak, and Apple has recently reduced orders by as much as 50 percent for its suppliers. The company, however, expects sales to recover in the fall of this year when a total of three models would be unveiled, including a more affordable iPhone with an LCD screen.