(Bloomberg) -- The arm of Foxconn Technology Group that makes smartphones for Chinese vendors including Huawei Technologies Co. and Xiaomi Corp. warned net income will slide at least 52 percent in 2016, expected to be the industry's worst year on record. Shares dropped.
FIH Mobile Ltd. blamed “customer transition” for depressing demand from major clients and pushing revenue more than 23 percent lower to less than $5.7 billion this year. The company expects profit of less than $110 million in 2016 compared with $20.8 million in the first six months. That sharp fall in results would nonetheless mark an improvement from the first half of the year, when earnings plummeted 84 percent.
The Hong Kong-listed company's biggest clients include Huawei, Lenovo Group Ltd. and Sony Corp., according to supply-chain data compiled by Bloomberg. All are jostling for market share with Samsung Electronics Co. and Apple Inc. in a flat-lining market that's seen Chinese demand tail off while Western markets stagnate. FIH didn't elaborate on its business relationships on Monday.
“There have been improvements in the Group's performance so far in the second half of 2016,” the company said in a stock exchange filing, adding that it could revise its forecasts as the year progresses.
FIH Mobile's shares fell 2.3 percent in Hong Kong trading. Foxconn is the main assembler of Apple iPhones through Hon Hai Precision Industry Co.
To contact the reporter on this story: Edwin Chan in Hong Kong at echan273@bloomberg.net. To contact the editors responsible for this story: Robert Fenner at rfenner@bloomberg.net, Edwin Chan
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