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Foxconn anticipates growth in Q2 after Q1 revenue decline

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In Short:

Taiwan’s Foxconn, the world’s largest contract electronics maker, expects a rise in second-quarter revenue after underperforming in the first quarter. The company is optimistic about growth both quarter-on-quarter and year-on-year. Revenue last month was the second highest on record, increasing by 11.8% year-on-year. Foxconn’s shares have surged 52% this year. The company holds its first-quarter earnings calls on May 14.

Foxconn Expects Rise in Second Quarter Revenue

Taiwan’s Foxconn, the world’s largest contract electronics maker and the biggest assembler of Apple’s iPhone, has announced that it expects a rise in second quarter revenue after underperforming market expectations in the previous quarter.

Seasonal Trends and Transition Period

The first quarter is traditionally quieter as Taiwan’s tech companies gear up to supply smartphones, tablets, and other electronics for the year-end holiday period in Western markets. Foxconn stated that this year’s second quarter remains a traditional off-peak season with major products transitioning between old and new versions.

Positive Outlook for Second Quarter

Foxconn anticipates growth in the second quarter both quarter-on-quarter and year-on-year. The company reported a revenue of T$447.54 billion ($13.96 billion) last month, representing an 11.8% year-on-year rise.

Performance and Expectations

However, the first quarter revenue saw a 9.6% decline year-on-year to T$1.322 trillion, falling short of market expectations. Foxconn attributed the decline in revenue from smart consumer electronics products to a high base from the previous year.

Cloud and Networking Segment Growth

On the positive side, Foxconn reported significant year-on-year growth in cloud and networking products in the first quarter, driven by strong customer demand in the cloud segment.

Future Outlook and Market Performance

Foxconn expressed a bullish outlook for the year, expecting a significant revenue increase fueled by demand for artificial intelligence servers. The company’s shares have surged 52% compared to a 13% jump in the broader market so far this year.

Upcoming Earnings Call

Foxconn is scheduled to hold its first quarter earnings call on May 14.

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