Foxconn International Sees 2012 Net Loss on Waning Demand

Foxconn International Holdings Ltd., a contract maker of phones for Nokia Oyj and Research in Motion Ltd., said it will record a full-year net loss, citing lower demand from its main customers.

The company’s gross profit margins also narrowed on “unfavorable” pricing changes and higher costs and it will record an impairment on some assets, according to a Hong Kong stock exchange filing by Foxconn yesterday.

Analysts estimate on average that the company may report a net loss of $187.3 million for 2012, according to data compiled by Bloomberg. That compares with net income of $72.8 million in 2011. Foxconn, which also assembles the iPhone for Apple Inc., is controlled by Hon Hai Precision Industry Co., the world’s largest contract manufacturer of electronics, which indirectly owns 68.2 percent.

Foxconn’s second-half net loss will be narrower than the $226 million shortfall it recorded in the first six months of last year, mainly due to its efforts to improve operating efficiency, make cost savings and dispose of assets, the company said.

Foxconn made the announcement after the Hong Kong stock exchange closed yesterday evening. The stock declined less than 1 percent to HK$3.58 at the close, taking its decline so far this year to 4.8 percent. The shares have fallen by 29 percent over the past 12 months compared with a 18 percent gain in the city’s benchmark Hang Seng Index.

The company will publish its audited results later in the year, Foxconn said.

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