CORRECTED – CORRECTED-UPDATE 1-Foxconn swings to H2 profit but misses foreca

(Corrects to mln in first bullet point, instead of bln)

* H2 net profit $57.3 mln; mkt f’cast was $100.9 mln profit

* 2009 revenue down 22 pct, as firms outsource less

* Shares down 9 pct this year, lagging big board
(Adds details)

HONG KONG, April 15 (BestGrowthStock) – Foxconn (2038.HK: ), the
world’s top contract cellphone maker, returned to the black in
the second half, but its results were well below forecasts, as
it said the global economic recovery remained tenative.

Foxconn’s clients such as Nokia (NOK1V.HE: ), Motorola
(MOT.N: ) and Sony Ericsson (6758.T: )(ERICb.ST: ) have been
outsourcing less as demand for discretionary buys such as
cellphones has fallen.

“In 2010, while the overall economic and consumer
confidence seem to improve from the trough, Greece and the rest
of Europe still could bring more uncertainties and macro risks
to the global economy,” Foxconn said in a statement to the Hong
Kong Stock Exchange.

Research firm iSuppli said on Wednesday that while
shipments at the world’s top 10 contract cellphone makers were
expected to rise in 2010 to 204 million units, it remains well
below the 280 million units seen in 2008.

The tech sector has, however, been showing positive signs,
with better-than-expected 2010 revenue and margin forecasts
from tech bellwether Intel (INTC.O: ) raising expectations for a
stronger recovery. [ID:nSGE63D09P]

“There’s been a clear rebound in demand for consumer
electronics in the second half of 2009, if you go by how
Foxconn’s peers in Taiwan are doing,” said Lu Chialin, an
analyst at Macquarie Securities in Taipei before Foxconn
released its results.

“However, a discretionary item like a cellphone is very
volatile business, and it’s one of the first things consumers
pull back on if the economy starts going downhill.”

The company swung to a second-half net profit of $57.3
million from a $21 million loss for the same period a year
earlier, according to Reuters calculations based on company
figures.

The results lagged market expectations for a $100.9 million
net profit, according to a poll of 14 analysts surveyed by
Thomson Reuters I/B/E/S.

Its shares are down over 9 percent so far this year,
lagging a roughly 1 percent rise on the Hang Seng Index (.HSI: ).

Revenue fell 22 percent to $7.2 billion from $9.3 billion
in 2008, as cash-strapped consumers opted for cheaper products
and as increasing competition depressed prices.

Most top brands carry out their own design work, but depend
on contract manufacturers such as Foxconn and Singapore-based
Flextronics (FLEX.O: ) for the manufacturing.

Investment Research

(Reporting by Kelvin Soh, editing by Will Waterman)

CORRECTED – CORRECTED-UPDATE 1-Foxconn swings to H2 profit but misses foreca