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Thursday, 28 April 2011 11:43

Foxconn haemorrhages profits

Written by Nick Farell


Lost 26 per cent in the last quarter
Foxconn posted a 26 percent fall in net profit in the fourth quarter, in what the company dubbed a "challenging" year.

Foxconn made $742.6 million in October-December, according to Reuters calculations. The outfit made much less than what analysts hoped. Market watchers originally expected rising labour and component costs would seriously impact Foxconn's profitability in 2010. The outfit's strong revenues last year still managed to boost its overall profitability despite a drop of 1.37 percentage points in its gross margin from the 2009 level to 8.15 per cent.

It looks like flogging nearly everything that Apple makes was not enough to pull the company's nadgers out of the fire. With figures like that the outfit would be hoping to come up with a Wizard wheeze to combat losses.  It seems that  Taiwan's Economic Daily newspaper is saying that the outfit is  interested in investing in solar cell manufacturer Neo Solar Power.

Of course when you are having an off year there is nothing better than going back into the industry that smacked you over the nose last time. Foxconn has tried to expand into the solar tech business before.  That time a planned acquisition of E-Ton Solar Tech Co Ltd fell through in January.

Nick Farell

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Comments  

 
+9 #1 dicobalt 2011-04-28 12:29
Rising labor costs lol. Their labor costs are still microscopic. 1Q are always less than 4Q for obvious reasons.
 
 
+1 #2 yourma2000 2011-04-28 13:57
And this is the company that makes the iPad for Apple, what percentage is the employee losses this quarter?
 
 
+3 #3 Bl0bb3r 2011-04-28 16:21
The safety nets are working... I guess none so far, maybe when one of them jumps outside of foxconn.

What they need to do is to jack up prices for Apple... Apple is making waaaayy too much money for too little too easy, and when foxconn will see that things will change for them.
 
 
-5 #4 Warrior24_7 2011-04-28 22:30
Quoting Bl0bb3r:
What they need to do is to jack up prices for Apple... Apple is making waaaayy too much money for too little too easy, and when foxconn will see that things will change for them.


Jack up the prices and lose the business! Apple will just go elsewhere. Apple business is THE best asset they have, and its an asset that is mouth watering to other companies. That is the stupidest suggestion yet.
 
 
+4 #5 Twist3d1080 2011-04-28 23:13
Quoting Warrior24_7:
Quoting Bl0bb3r:
What they need to do is to jack up prices for Apple... Apple is making waaaayy too much money for too little too easy, and when foxconn will see that things will change for them.


Jack up the prices and lose the business! Apple will just go elsewhere. Apple business is THE best asset they have, and its an asset that is mouth watering to other companies. That is the stupidest suggestion yet.


How many other companies have the capacity to manufacture all of Apples I-devices? Its not like manufacturing capacity grows on trees. The only other place I could think that could put out that mass of electronics is Samsung... wait no cause Apple just sued them.
 
 
-6 #6 Warrior24_7 2011-04-28 23:51
Quoting Twist3d1080:
How many other companies have the capacity to manufacture all of Apples I-devices? Its not like manufacturing capacity grows on trees. The only other place I could think that could put out that mass of electronics is Samsung... wait no cause Apple just sued them.


Yep they sued them and Samsung still wants that business and will probably get it! Apple knows what it has and will sue your @$$ if you f*k with them. To lose that kind of business when you're already in trouble is foolhardy! They signed a contract with Apple and thats what they agreed to.
 

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