Foxconn issues profit warning to shareholders

NOT ONE for mincing its words, Taiwanese contract manufacturer, Foxconn, issued a Profit Warning noting its consolidated net profit for 2008 would "show a significant decline" from the previous year.

Foxconn, which also goes by the name of Hon Hai Precision Industry, blamed its profit slump on "changes in product mix, lower demand and pricing due to global economic downturn, and higher operating costs". The higher operating costs were, in turn, blamed on "lower utilization of facilities, the relocation of certain of the Group's production facilities and the restructuring of the Group's global operations."

Not quite finished with pointing the finger and shifting culpability, Foxconn, which counts Apple, Dell, HP, Sony and others as customers, added its fiscal results were damaged by increased R&D spending, reduced foreign exchange gains and higher income tax expense.

"Shareholders of the Company and potential investors are advised to exercise caution in dealing in the shares of the Company", the firm warned, pessimistically.

Unsurprisingly, Foxconn shares took a three per cent dip in Taipei trading. µ