Apple, Inc. (NASDAQ:AAPL)'s iPhone assembler Hon Hai Precision Industry Co., Ltd. (OTC:HNHPF) turned in forecast-beating results for the first quarter, defying the odds that included COVID lockdowns in China, supply challenges, input price inflation and demand slowdown.
What Happened: Hon Hai, widely known as Foxconn, reported a 5% increase in its first-quarter net income to NT$29.45 billion ($990 million), Nikkei Asia reported. This marked the biggest profit in eight years, the report noted.
The Taiwanese contractor also confirmed its previously-reported quarterly revenue at NT$1.4 trillion.
Despite the input cost inflation and components shortages, gross margin, as well as operating margin, expanded modestly to 6.02% and 2.61%, respectively.
Apart from Apple, Foxconn supplies to big techs like Alphabet, Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG), Dell Technologies, Inc. (NASDAQ:DELL) and Sony Group Corporation (NYSE:SONY).
Related Link: Apple Supplier Foxconn Sees 2022 As 'Challenging' While Bringing 'Opportunities Not Seen In Decades'
Why It's Important: Foxconn was forced to lock down the Shenzhen assembly plant, its second-largest production base in China, for several days in March to comply with the COVID guidelines of the local administration.
The disruptions continued into the June quarter even as Zhengzhou announced movement curbs for May 4-10, Foxconn reportedly said it would continue with its production at its plant in the city. Noted Apple analyst Ming-Chi Kuo warned that if curbs are not lifted in the city by June, the production of Cupertino's upcoming iPhone 14 would be affected.
Foxconn reportedly said it expects revenue to be little changed in the June quarter, citing COVID-19 impact.
Separately, Foxconn announced the signing of an agreement with U.S.-based Lordstown Motors Corp. (NASDAQ:RIDE) for contract manufacturing and product development. The company also confirmed the closing of the purchase of Lordstown's Ohio facility purchase.
With the $55 million investment in Lordstown, Foxconn has taken a 55% stake in the former. The Taiwanese company said Ohio will now be its EV manufacturing hub in North America.
Foxconn shares trading over-the-counter closed Wednesday's session down 1.01% at $6.83, according to BenzingaPro data.
Related Link: China Lockdowns Could Evolve As A 'Demand Problem' For Apple, Says Analyst
Photo: Courtesy of Nadkachna via Wikimedia
