Soaring operating costs and poor iPhone X sales
Foxconn posted second-quarter net profit well below expectations and blamed a rise in component costs and unsold inventory.
The company reported net profit of $567.25 million – 20 per cent short of analyst expectations and slightly below the year-earlier results.
Foxconn’s results showed that its gross margin narrowed in the second-quarter in part owing to the cost of carrying unsold inventory of the iPhone X. Overall global smartphone shipments fell three percent to 350 million units in the April-June quarter compared with a year earlier, market research firm Strategy Analytics says.
The company’s report also illustrates its moves to diversify by pushing into new areas such as display screens – it bought Sharp Corp in 2016 – autonomous car startups and investments in cancer research.
