We see some of the economic negative impacts caused by the ongoing COVID-19 pandemic in the first quarterly reports of 2020. Foxconn made its contribution today. According to the manufacturer, it hit a two-decade low in the first quarter of this year. The reason? Foxconn was forced to cease operations in China amid the coronavirus pandemic. In addition, demand from key customers like Apple declined exponentially. The report reports a net profit of $ 70.3 million. This is a massive 90% drop from the previous year and the lowest value that Foxconn has shared since the first quarter of 2000.
Despite the negative results in the first three months of 2020, the company expects an increase in the second quarter. According to his statement, Foxconn expects its business to stabilize in the second quarter. All factories in China have been reopened. The company predicts double-digit growth in the second quarter. Of course, this is still not enough for an increase from year to year. In fact, the company anticipates a further decline in annual earnings, but should not be as bad as in the first quarter.
The chairman of Foxconn predicts annual sales growth of more than 10% for the corporate and computer sectors. However, this is not very optimistic, especially if we take into account weak demand. This particular factor will continue in the coming months as several customers have less purchasing power as a direct result of the ongoing pandemic.