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iPhone Maker Foxconn Expects 15% Q1 Revenue Hit From Coronavirus, Says Production Rebounding

Taiwanese consumer electronics manufacturer Hon Hai Precision Co.

Benzinga · 03/04/2020 05:21

Taiwanese consumer electronics manufacturer Hon Hai Precision Co. Ltd. (OTC: HNHPF) expects its production in China to return to a regular pace by the end of March, Chairman Young-Way Liu said in an investors call Tuesday, according to a Nikkei Asian Review report.

The Coronavirus Impact On Foxconn 

Foxconn, best known for making Apple Inc. (NASDAQ: AAPL) devices including iPhones, restarted production earlier last month as the spread of the COVID-19 virus seemingly slowed in the country — but continued to suffer a labor shortage as people took precautions against the deadly virus.

The company's production has already returned to 50% of its normal low-season level, Liu told investors, according to the report, and he expects it to come back to full capacity by the end of March. 

The coronavirus outbreak could reduce Foxconn's first-quarter revenue by as much as 15%, the company's chairman said. 

Foxconn, which also makes products for a host of other companies including Amazon.com Inc. (NASDAQ: AMZN) and Nintendo Co. Ltd. (OTC: NTDOY), will also continue to diversify its business outside of China, a strategy accelerated by the recent trade war between the United States and China and the pandemic, Liu reportedly said on the investor call. 

Foxconn's Coronavirus Response 

Apple downwardly revised its second-quarter guidance for the second quarter on the basis of production in China that was impacted by the coronavirus outbreak. 

In a rush to restart production, FoxConn resorted to making masks in its electronics factories, the Nikkei reported in February.

The electronics maker also gave a deadline to employees to return from Taiwan to China at the height of the outbreak.

The number of reported coronavirus cases in China have gradually dropped to a lesser number than the cases reported outside the country.

Photo courtesy of Apple.