Foxconn’s August sales drop 8% y/y, Q3 outlook better

TAIPEI (Reuters) – Taiwan’s Foxconn, the world’s largest contract electronics maker and a major supplier for Apple (NASDAQ:), said on Tuesday revenue in August fell 8% year-on-year but forecast a better business outlook ahead of new product releases by major customer Apple.

Foxconn, formally called Hon Hai Precision Industry Co Ltd, said revenue last month reached T$412.83 billion ($12.93 billion), down 12% from July.

Revenue in its smart consumer electronics products, including smartphones, declined in August on the year due to “customers’ conservative pull-in”, the company said in a statement without elaborating.

Summer is traditionally a busy time for Foxconn as major vendors such as Apple gear up for new product launches ahead of the end-of-year holiday shopping season.

“With the second half of the year peak season currently underway, operations will gradually ramp up,” Foxconn said.

“The outlook for the third quarter, which will be better than the second quarter, is expected to increase at an on-quarter pace higher than the average level of the previous two years.”

Apple will host its fall event on Sept. 12, setting the stage for what analysts believe will be the unveiling of a new line of iPhones and smartwatches.

Other businesses, including computing products such as PCs and cloud and networking products, declined from a year ago, Foxconn said, without elaborating.

Foxconn beat estimates for second-quarter earnings unveiled last month thanks to a booming artificial intelligence sector but it retained a cautious outlook for this year due to global economic uncertainties.

The company downgraded its outlook for full-year revenue to a slight decline from a previous guidance of flat as it joined other companies grappling with a weak global economy and a sluggish recovery in China.

Foxconn’s Taipei-listed shares closed up 0.5% on Tuesday ahead of the release of its August sales, compared with flat in the broader market.

($1 = 31.9170 Taiwan dollars)