Apple's Biggest iPhone Assembler Posts 72% Profit Surge Even As Revenue Takes Hit From Weaker Consumer Electronics Demand

Loading...
Loading...

Taiwan's Hon Hai Precision HNHPF operating as Foxconn Technology Group has reported a significant increase in its first-quarter net profit, despite a decline in revenue attributed to weakened consumer electronics demand.

What Happened: The Taiwan-based contract manufacturer, known for assembling Apple Inc. AAPL’s iPhones, announced on Tuesday that its net profit for the first quarter rose by 72% from the previous year, reaching NT$22.01 billion (US$679 million), reported The Wall Street Journal.

This increase, however, fell short of the NT$28.76 billion estimated by analysts in a FactSet poll. The surge in profit was attributed to a low base last year when Foxconn faced a NT$17.3 billion write-down linked to its 34% stake in Japanese electronics maker Sharp.

Despite the profit surge, first-quarter revenue dropped by 9% to NT$1.324 trillion due to reduced consumer electronics demand.

The pandemic had caused a delay in production and shipment at Foxconn’s Zhengzhou, China factory, leading to a high base of comparison for the first quarter of last year. Nevertheless, its cloud and networking segment experienced strong revenue growth, driven by robust artificial intelligence server demand.

See Also: Check Out What Whales Are Doing With PLTR

Foxconn has been diversifying its business lines in recent years, including ventures into electric vehicles and AI. The company is also expanding its production in countries such as India to reduce its reliance on China.

Why It Matters: Foxconn’s performance comes on the heels of a 9% decline in its first-quarter revenue for 2024. Despite this, the company anticipated a revenue increase for the second quarter of 2024, traditionally considered an “off-peak season.”

Earlier in May, Foxconn reported its best-ever April revenue, marking a 19% surge in monthly revenue. This achievement led to a record high for April and a subsequent rise in the company’s shares to an all-time high in Taiwan.

In March, it was reported that Foxconn was making a play for the AI server market through a strategic partnership with NVIDIA Corp NVDA. This move was expected to position Foxconn to benefit from a closer partnership with Nvidia in the long run.

Despite its financial performance, Foxconn has been facing political challenges in its home country. In November, Foxconn’s founder, Terry Gou, withdrew his bid for the Taiwanese presidency, leading to a political shakeup as opposition parties vied for power.

Read Next: Cardano Founder Charles Hoskinson Says Voting For Biden Is A ‘Vote Against American Crypto Industry’

Image Via Shutterstock


Engineered by Benzinga Neuro, Edited by Kaustubh Bagalkote


The GPT-4-based Benzinga Neuro content generation system exploits the extensive Benzinga Ecosystem, including native data, APIs, and more to create comprehensive and timely stories for you. Learn more.


Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: EarningsEquitiesNewsMarketsTechartificial intelligenceChinafoxconnKaustubh Bagalkotetaiwan
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...