“Foxconn International Holdings Ltd (FIH), the world’s biggest contract maker of cellphones, fell into the red in 2012 with a net loss of $316.4 million due to weak orders from some of its major customers,” Lee Chyen Yee reports for Reuters. “The loss, the company’s biggest since its listing in 2005, was slightly smaller than an average estimate of $317.9 million from a Thomson Reuters I/B/E/S poll of 10 banks and brokerages. FIH had reported a net profit of $72.8 million in 2011, it said in a statement on the Hong Kong stock exchange on Thursday.”
“‘FIH’s fundamentals remain lackluster due to a lower-than-expected sales contribution from new customers (Amazon/Apple) and increasing low-margin orders from China smartphone customers (Xiaomi/Huawei),’ Dale Gai, an analyst at Barclays Research, said in a report before the earnings release,” Yee reports. “FIH also said it planned to change its name to FIH Mobile Ltd to avoid confusion with its unlisted parent Foxconn Technology Group.”
Yee reports, “The name change is subject to approval by shareholders and authorities in the Cayman Islands, where the company is incorporated. FIH, which traditionally assembles products for clients including Nokia Oyj and Huawei Technologies Co Ltd, has struggled in recent years as many of its customers’ order books have shrunk. Analysts have said the company had begun taking some Apple Inc orders from parent Foxconn Technology Group’s flagship unit Hon Hai Precision Industry Co Ltd, though the contribution to its bottom line is so far limited.”
Read more in the full article here.
This. Means. Something. Or. Something.
I’m not sure. But it may do.
It is not an indicator of iPhone or iPad sales.
FIH is a subsidiary of Hon Hai Precision Company. Hon Hai is where the vast majority of Apple products are manufactured.
Recently Hon Hai has been utilizing FIH production capacity, freed up by other FIH customers, to partially satisfy Apple’s expanding production needs.
Apparently they aren’t moving Apple production to FIH fast enough to offset declining needs of its other customers.
Apple has signed deals with Pegatron and maybe others to assemble some of its devices (iPhone 5, iPad Mini). That could account for some of the weakness in Foxconn’s Apple orders.
http://www.patentlyapple.com/patently-apple/2012/12/apple-to-greatly-expand-ipad-mini-production-in-2013.html
Market saturation. Economic failures. Rampant government taxation. Unlimited government spending. All these tend make consumers more thrifty thus causing a slump in sales of nonessential items and a reluctance to upgrade to minimally superior products.
Yes. A name change. That will fix it.
So as not to be confused with exactly the same company… Or is it? Oh, it’s a parent company. And incorporated in the Caimen Islands. Ah, all is good. Nothing dodgy there.
Apple needs to get the heck out of China!
So, the logic is because they make products for Apple then the increasing orders of Apple’s more expensive product orders (which is lumped into the articles “increasing low-margin orders” from everyone else) is causing Foxconn to loose money. What? Are you sure it isn’t the drop in orders from all those ZERO profit products that they make for everyone else that is the problem. Apple has growing sales of all their products and the rest are tanking so Foxconn not able to cover their overhead cost.
This has nothing to do with Apple. Apple is the only good orders that Foxcomm is receiving. Maybe Apple can pre-pay and float Foxconn some money in these hard times while Dell, HP and the other die off (RoadKill).
Foxconn isn’t just in China. I believe that the Apple products being built in Brazil are in a Foxconn facility. At some point, Apple will use robots all around the world where ever possible. Maybe at their own assembly facilities. Is it the “law of big numbers” or “world domination”? iSkynet?
Apple doesn’t need to get the heck out of China, they will soon become Apple’s biggest customer, bigger than the U.S.
So now that worker conditions have improved we… oh crap.. what just happened?
Everyone:
Think Hollywood Accounting.
In the countries in which Foxconn operates (primarily at least) accounting principles are a bit different and adhered to differently than they are for companies like Apple.
Some countries you always want to lose money in and others you always want to make money. Thanks to Hollywood accounting you can show a loss even on the most profitable of blockbusters.
… for apple.
(a more accurate article would say:
Foxconn is suffering because:
— everybody except apple wants to pay Low Prices for Cheap Crap
— Apple wants to buy High Quality Stuff and will Pay Premium (with adequate salaries for workers) but Foxconn can’t build those precision stuff fast enough
so their profit is down )
FIH is only a small subsidiary of FTG, Foxconn Tech Group where almost all of Apple’s orders are booked.
This will no doubt be spun into a reduction of orders from Apple. Prepare for a stock dip tomorrow.
I wonder if Foxconn International Holdings Ltd makes iPhone .
Isn’t its mother company making ?