Apple supplier Foxconn’s first-quarter profit jumps 72% but misses forecasts

By Thomson Reuters May 14, 2024 | 1:23 AM

TAIPEI (Reuters) -Apple supplier Foxconn reported a 72% rise in first-quarter profit, boosted by strong demand for AI servers and coming off a low base from the period a year earlier, but the growth was lower than expected.

The Taiwanese company, the world’s largest contract electronics maker, said net profit for the January-March quarter rose to T$22.01 billion ($679 million) from T$12.8 billion in the same period the previous year, when earnings were hit by a T$17.3 billion writedown related to its 34% stake in Japanese electronics maker Sharp Corp.

While the profit missed the T$29.31 billion forecast by analysts, it was Foxconn’s third consecutive quarterly profit rise.

In the first quarter, consumer electronics including smartphones accounted for 48% of its revenue while cloud and networking products, including servers, contributed 28%.

Foxconn said it expects revenue for the second quarter to grow significantly from a year earlier, broadly in line with previous guidance, with revenue for smart computer electronics likely to be flattish. It does not provide numerical guidance.

The company, formally called Hon Hai Precision Industry Co Ltd, said in March that it expected a significant rise in revenue this year driven by booming demand for artificial intelligence servers.

Apple’s quarterly results and forecast beat modest expectations this month, and CEO Tim Cook said revenue growth would return in the current quarter.

Foxconn’s shares have risen 65% so far this year, driven by its rosy AI outlook, far outperforming a 17% gain for the broader market.

($1 = 32.4180 Taiwan dollars)

(Reporting by Yimou Lee and Faith Hung; Writing by Ben Blanchard; Editing by Tom Hogue and Sonali Paul)