Coronavirus will hit iPhone-maker Foxconn hard in 2020
Apple supplier Foxconn says that it expects its full-year 2020 revenue to take a hit as a result of the outbreak of coronavirus in China.
Foxconn, the world’s largest electronics manufacturer, plays a crucial role in assembling products for Apple. Foxconn’s admission about the impact of coronavirus follows Apple’s decision to pull its previous forecast for fiscal second quarter earnings as a result for the second time in 15 years.
“As we are moving ahead with the reopening of mainland China manufacturing complexes in a relatively cautious manner, this will indeed have a negative impact on full-year revenues,” Foxconn said in a statement to the Taiwan Stock Exchange.
Foxconn’s mention of the “cautious” resumption of work refers to the enormous complexity around doing so. Foxconn is gradually getting its facilities back up and running — including reopening one iPhone-critical site. It has also set up a production line making surgical masks, installed infrared scanners, and developed a smartphone app which sends alerts to employees if they are too close to infection hotspots. However, many people have yet to return to work.
Foxconn says that its factories outside China are currently running at full capacity. This includes plants in Vietnam, Indonesia and Mexico.
Foxconn revenue in 2020
The Financial Times notes that:
“Foxconn’s revenue warning on Thursday came in response to a report by Taiwan’s China Times which, referring to unnamed investor sources, said the group’s revenue could plummet by as much as 45% in the first quarter.”
By and large, investors shrugged off Apple’s decision to pull its Q2 earnings guidance. It hasn’t impacted shares as much as it could do. A recent Wall Street Journal article, titled “Apple Isn’t Priced for Sick Leave,” sums up the attitude. The TL;DR version is that, while this is a short-term inconvenience, there’s plenty of reason to be optimistic about Apple’s prospects later in the year. Apple recently doubled its donation to efforts to battle coronavirus
At present, the novel coronavirus — named COVID-19 — has infected around 75,600 people worldwide. At least 2,126 people have died as a result of the virus. All but 11 of these deaths have occurred in mainland China.