Foxconn, the Taiwanese company formerly known as Hon Hai Precision Industry, has reported an unexpected 11% rise in profits for the third quarter, defying expectations of a loss. While top line revenue did decrease, the fourth quarter earnings are anticipated to decline as well, albeit at a better rate than previously anticipated.
Positive Implications for Apple and the Electronics Industry
This news would likely be welcomed by Apple (AAPL) and other electronics manufacturers. The industry has experienced a slowdown this year due to reduced demand for computers and devices as consumers shifted their spending priorities amidst the pandemic. Apple’s recent fourth-quarter sales forecast disappointed investors.
Political Context
These results also come ahead of an important meeting between Chinese leader Xi Jinping and President Joe Biden in San Francisco on Wednesday. This meeting marks the first face-to-face encounter between the two leaders in a year and aims to stabilize their somewhat deteriorating relationship.
Market Reaction
In response to the report, Foxconn shares closed 2.4% higher in Taiwan. However, its American Depositary Receipts have suffered an 8.8% loss this year.
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