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Apple Stock Slides As Foxconn’s Smartphone Assembler Warns Of 52% Profit Drop In 2016

Apple Stock Slides As Foxconn’s Smartphone Assembler Warns Of 52% Profit Drop In 2016

 

zerohedge.com / by Tyler Durden / Oct 3, 2016 11:13 AM

A lack of new “disruptive” innovation in smartphones continues to hit demand for new products leaving manufacturers to suffer the consequences.  The latest evidence of the slowing growth comes from FIH Mobile, a subsidiary of Foxconn Technology, who just announced new guidance for 2016 net income which is now expected to be down 52% YoY.  The company’s largest clients include Chinese smartphone OEMs like Huawei Technologies and Xiaomi as well as US OEM MotorolaThe subsidiary has also historically benefited from spill-over Apple volume from it’s parent company, Hon Hai.  Per the Company’s press release, consolidated earnings are expected to collapse to below $110mm in 2016 from over $228mm in 2015.

As at the date of this announcement, the Board expects the Group’s consolidated net profit for the year ending 31 December 2016 to be less than US$110,000,000 (i.e. a decrease of at least 52% when compared with the Group’s consolidated net profit of US$228,664,000 for the year ended 31 December 2015).

The substantial earnings decline was attributed to a 24% decline in YoY revenue and lower other income including service fees and molding sales.

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