Foxconn Posts Biggest-Ever Loss
Foxconn International Holdings (FIH), the world’s biggest contract maker of cellphones, fell into the red in 2012, with a net loss of $316.4 million, due to weak orders from some of its major customers. The loss, the company’s biggest since its listing in 2005, was slightly smaller than an average estimate of $317.9 million from a Thomson Reuters I/B/E/S poll of 10 banks and brokerages. FIH had reported a net profit of $72.8 million in 2011.
“FIH’s fundamentals remain lackluster due to a lower-than-expected sales contribution from new customers (Amazon/Apple) and increasing low-margin orders from China smartphone customers (Xiaomi/Huawei),” said Dale Gai, an analyst at Barclays Research.
FIH also said it planned to change its name to FIH Mobile to avoid confusion with its unlisted parent Foxconn Technology Group. The name change is subject to approval by shareholders and authorities in the Cayman Islands, where the company is incorporated. FIH, which traditionally assembles products for clients including Nokia Oyj and Huawei Technologies, has struggled in recent years as many of its customers’ order books have shrunk. Analysts have said the company had begun taking some Apple orders from parent Foxconn Technology Group’s flagship unit, Hon Hai Precision Industry, though the contribution to its bottom line is so far limited.
Foxconn has not confirmed these reports. Shares in FIH, which has a market value of $2.8 billion, fell by a quarter in 2012 due to its poor financial performance.
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