Foxconn International Holdings Ltd. (2038), the phone unit of the world’s biggest contract maker of electronics, fell the most in 3 1/2 years in Hong Kong trading after forecasting its first-half loss will widen.
The handset manufacturer tumbled 16 percent to close at HK$3.78, the biggest drop since October 2008. The stock has declined 25 percent this year, compared with the 13 percent gain in Hong Kong’s benchmark Hang Seng Index.
Weaker demand from major customers and higher costs are expected to cause first-half loss to widen “significantly,” Foxconn International said in a Hong Kong stock exchange filing yesterday. The unit, controlled by Taiwan billionaire Terry Gou’s Hon Hai Precision Industry Co. (2317), is a supplier to Nokia Oyj (NOK1V), which last week reported lower first-quarter handset sales.
Foxconn and other suppliers face “a difficult pricing environment,” Goldman Sachs Group Inc. analysts Robert Yen and Iris Wu wrote in a report today. Nokia’s business is being affected by the growth of rivals including Apple Inc. (AAPL:US) and Samsung Electronics Co. (005930), according to the report.
Foxconn reported a $17.7 million net loss for the first half of 2011. Last year, the Hong Kong-listed company had annual net income of $72.8 million.
To contact Bloomberg News staff for this story: Mark Lee in Hong Kong at email@example.com
To contact the editor responsible for this story: Michael Tighe at firstname.lastname@example.org