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March 31, 2011 11:38 am EDT
Foxconn, the mega-manufacturer behind many popular gadgets, posted a $218.3 million net loss for 2010 yesterday. While the company had previously predicted lower earnings amid suicide-related wage increases and welfare costs, the reported figure is still worse than analysts' estimation of around $202 million, which also far outweighs the prior year's $38.6 million profit. Foxconn puts the blame on higher consolidated income tax and increased competition, as well as "cost streamlining actions" -- a reference to the ongoing relocation and expansion plans, which are also the outcome of the Chinese suicides -- that took longer than expected and led to increased spending along with higher manufacturing overhead. As for 2011, Foxconn said it'll "take decisive actions to conclude our capacity relocation, optimize our cost structure and return to profitability." Of course, further losses could accelerate plans to increase prices, which could ultimately put everyone in a lose-lose situation if Foxconn can't compete. Excerpts from the financial report can be found after the break.
Businessweek | 
Foxconn International Holdings (PDF) ||Comments
Original Link: http://www.engadget.com/2011/03/31/foxconn-reports-218-million-full-year-net-loss-exceeding-analy/
Foxconn reports $218 million full-year net loss, worse than analysts' expectation
Foxconn, the mega-manufacturer behind many popular gadgets, posted a $218.3 million net loss for 2010 yesterday. While the company had previously predicted lower earnings amid suicide-related wage increases and welfare costs, the reported figure is still worse than analysts' estimation of around $202 million, which also far outweighs the prior year's $38.6 million profit. Foxconn puts the blame on higher consolidated income tax and increased competition, as well as "cost streamlining actions" -- a reference to the ongoing relocation and expansion plans, which are also the outcome of the Chinese suicides -- that took longer than expected and led to increased spending along with higher manufacturing overhead. As for 2011, Foxconn said it'll "take decisive actions to conclude our capacity relocation, optimize our cost structure and return to profitability." Of course, further losses could accelerate plans to increase prices, which could ultimately put everyone in a lose-lose situation if Foxconn can't compete. Excerpts from the financial report can be found after the break.Continue reading Foxconn reports $218 million full-year net loss, worse than analysts' expectation
Foxconn reports $218 million full-year net loss, worse than analysts' expectation originally appeared on Engadget on Thu, 31 Mar 2011 07:38:00 EDT. Please see our terms for use of feeds.
PermalinkBusinessweek | Foxconn International Holdings (PDF) ||CommentsOriginal Link: http://www.engadget.com/2011/03/31/foxconn-reports-218-million-full-year-net-loss-exceeding-analy/
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