Foxconn plays it safe with its outlook as smartphone sales shrinks

Apple Inc supplier Foxconn has given a cautious outlook for the current quarter.

Foxconn posted results that exceeded expectations but gave a cautious outlook as the pandemic-fuelled smartphone demand slows.

Other Asian tech firms that have warned of a drop in sales of smartphones, TVs and gadgets as surging inflation and recession fears dampen deepening consumer spending.

Foxconn expects that rising inflation will have a limited impact on demand for mid- to high-end smartphones in the rest of the year.

Foxconn said smart consumer electronics including smartphones – its main business driver – posted “significant growth” in the second quarter and accounted for half of its overall revenue. But it forecast flat revenue growth for that business in the quarter ending in September.

Both net profit and revenue for the April-June quarter rose 12%.

Foxconn anticipates revenues for cloud and networking products to be strong in the third quarter. It reaffirmed its stance from last month that overall revenue this year will grow, rather than a previous guidance of remaining flat.

Foxconn did not provide a numerical outlook.

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