Taipei, March 6 (CNA) The sales of Taiwan-based iPhone maker Hon Hai Precision Industry Co. fell more than 40 percent in February from a month earlier, in part due to production disruptions in China because of the novel coronavirus (COVID-19).
In a statement released Thursday, Hon Hai, known as Foxconn internationally, reported consolidated sales of NT$217.46 billion (US$7.25 billion) in February, down 40.35 percent from January and down 18.13 percent from February 2019.
Much of Hon Hai's production capacity is concentrated in China, where the highly contagious COVID-19 originated and where it employs more than 1 million workers.
Efforts by Beijing to contain the disease, including lockdowns of the hardest hit cities, have made it hard for workers to return to factories that were expected to reopen following the Lunar New Year holiday on Feb. 10, disrupting supply chains.
At an investor conference Wednesday, Hon Hai Chairman Liu Young-way (???) said production at the company's factories has met more than 50 percent of demand in the current quarter, a traditionally slow season for the electronics industry, since production resumed after the holiday.
Judging from that progress, Hon Hai's production in China is expected to meet seasonal demand by the end of March, Liu said.
Earlier this week, Apple CEO Tim Cook was quoted by international news media as saying the novel coronavirus spread was "a temporary condition, not a long-term kind of thing. Apple is fundamentally strong."
Echoing Cook, Liu said that after the production shortfall in the first quarter, Hon Hai expects to receive deferred orders in the second quarter, which would leave revenue for the first two quarters little changed from a year earlier.
He believed that the impact of the coronavirus on Hon Hai's bottom line in the first quarter should be "controllable."
According to Hon Hai's statement, its enterprise use division performed better than in January, with the performance of its computing devices, electronics components and consumer and smart gadgets trailing behind.
In the first two months of 2020, Hon Hai's consolidated sales totaled NT$582.03 billion, down 14.37 percent from a year earlier.
Analysts are estimating that Hon Hai's sales for the January-March period are expected to fall about 42 percent from a quarter earlier, while sales for the entire 2020 could increase 1-3 percent from a year earlier
Source: Focus Taiwan News Channel