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Apple supplier Foxconn to update on outlook after China’s COVID restrictions

Apple supplier Foxconn to update on outlook after China’s COVID restrictions

TAIPEI (Reuters) – Apple Inc supplier and iPhone assembler Foxconn plans to update its fourth-quarter outlook on Thursday, warning about the impact of COVID-19 restrictions at a major plant in Zhengzhou, China, this week .

Foxconn’s main Zhengzhou plant in central China, which employs about 200,000 people, has been shaken by discontent over stringent measures to curb the spread of COVID-19, with many workers fleeing the site.

The lockdown ended on Wednesday, although Foxconn said it was maintaining “closed loop” operations, referring to the bubble-like arrangements usually put in place as part of virus containment measures in China, where employees sleep. live, live and work in isolation from the wider world.

Foxconn said on Monday that it was working to resume full production there as soon as possible, and after previously being guided by “cautious optimism” in the fourth quarter, it said it was working on its plans given in Zhengzhou. Will “modify” the approach, although no details are given in .

Foxconn will release its third-quarter earnings Thursday at 0700 GMT, with analysts expecting an average profit of T$41.3 billion, an 11.7% year-on-year increase, according to Refinitiv, benefiting from continued demand for high-end consumer electronics. . and data centers.

The company said it would also provide an update on its outlook for the current quarter; Although it does not provide a numerical approach, only a comprehensive forecast in terms of general direction.

A source familiar with the matter said Foxconn aims to resume full production at its Zhengzhou plant by the second half of November.

Apple on Monday said it expects lower shipments of high-end iPhone 14 models after a significant production cut at a virus-hit plant in China, boosting its sales outlook for the year-end holiday season. will decrease.

The fourth quarter is traditionally a hot season for Taiwanese tech companies as they race to supply cellphones, tablets and other electronics to Western markets for the year-end holiday period.

Shares of Foxconn, formally called Hon Hai Precision Industry Co., Ltd., closed up 2.5% on Wednesday, better than the broader market’s 2.2% gain.

Shares are down 1.4% so far this year.

(Reporting by Ben Blanchard; Editing by Sherry Jacob-Phillips)



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