Foxconn, a major supplier for Apple, reported a 72% increase in first-quarter profit, driven by strong demand for AI servers and recovering from a low base the previous year. However, the growth fell short of expectations.
The Taiwanese company, the largest contract electronics manufacturer globally, announced that its net profit for January-March rose to T$22.01 billion ($679 million), up from T$12.8 billion in the same period last year. The previous year’s earnings were negatively impacted by a T$17.3 billion write-down related to Foxconn’s 34% stake in Japanese electronics firm Sharp Corp.
Despite the profit being lower than the T$29.31 billion predicted by analysts, this marks Foxconn’s third consecutive quarterly profit increase.
In the first quarter, consumer electronics, including smartphones, made up 48% of Foxconn’s revenue, while cloud and networking products, such as servers, accounted for 28%.
Apple, Foxconn predicts second-quarters
Foxconn anticipates significant year-over-year revenue growth in the second quarter, in line with previous forecasts, although it expects revenue from smart computer electronics to remain relatively flat. The company does not provide specific numerical guidance.
In March, Hon Hai Precision Industry Co Ltd, known as Foxconn, projected a substantial increase in revenue for the year, fueled by the growing demand for artificial intelligence servers.
Apple’s recent quarterly results and forecast exceeded modest expectations, with CEO Tim Cook indicating that revenue growth is expected to resume in the current quarter.
Foxconn’s shares have surged 65% this year, significantly outpacing the broader market’s 17% gain, driven by the company’s optimistic AI outlook.
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