What you need to know
- Hon Hai Precision has reportedly slashed its revenue growth predictions.
- The company trades as Foxconn, Apple's biggest iPhone manufacturing partner.
- The cuts are due to coronavirus.
Hon Hai Precision – trading as the more familiar Foxconn brand – has slashed its 2020 revenue growth predictions over concerns relating to the ongoing coronavirus outbreak, according to reports. Foxconn is Apple's main iPhone manufacturing partner.
Bloomberg's Debbie Wu reportedly got the information directly from chairman Young Liu via a text message. The new figures represent an increase of just 1% to 3%, down from the previous prediction of up to 5% growth.
"Given current market conditions, we are lowering to 1%-3%," Liu replied when asked about whether Hon Hai will cut its original sales growth forecast for this year.
The issues facing Foxconn are clear. With workers unable to move freely due to lockdowns, the movement of people and goods is currently problematic. And those are two things that you need if you're going to run a factory. Foxconn currently intends to re-open on February 10, but that could yet be pushed back if Chinese officials deem it necessary.
But while Chinese officials and companies have targeted Feb. 10 as the date to resume work in much of the country, doubts about the timing have grown in recent days as the virus death toll rises, workers find themselves stuck in municipal lockdowns and the transport of people and goods has been hampered.
Apple has similarly hedged its bets with its own predictions, providing a wider range in its sales forecasts during a recent earnings call.