Apple’s biggest contract manufacturer, Foxconn, endured a rough February as the COVID-19 coronavirus outbreak worsened in China.
The company, which is also the world’s biggest electronics manufacturer, suffered its biggest monthly drop in revenue in around seven years. Its earnings, announced Thursday, show an 18.1% decline in revenue versus the same period last year. This marks the company’s third straight month of decline.
The COVID-19 virus first emerged at the end of 2019 (hence the number in its name). To date, it has infected more than 93,475 people worldwide, causing more than 3,200 deaths. Cases have been confirmed in multiple countries, but the country worst affected so far is China, where Foxconn has its main factories.
Foxconn and COVID-19
Foxconn has worked hard to get back on track after the outbreak. The company set up a production line making surgical masks, installed infrared scanners in its plants, and developed a smartphone app that sends alerts to employees if they go too close to infection hotspots.
Recently it hired 83-year-old scientist Zhong Nanshan, the man credited with finding the right way to treat the previous SARS coronavirus, to advise the company on its coronavirus prevention and rehabilitation efforts.
There’s no doubt that coronavirus has impacted on it in a big way, however. Foxconn had to temporarily close several plants, including a critical iPhone assembly plant. When this factory reopened, it did so with fewer than 10% of its usual workforce. To counter this, Foxconn has started offering new perks to try and get employees back to work. These include free shuttle bus travel, free meals and increased bonuses. It says that it believes it will be able to resume regular production by the end of March.
In stock exchange filing, Foxconn revealed that its February revenue fell to T$217.5 billion ($7.28 billion). The company’s share price has fallen around 10% this year. Foxconn previously said it is likely that the coronavirus outbreak will affect its total 2020 revenues. It made a “mild downward revision” from its original earnings guidance for the year.
Source: Reuters
