The Foxconn factory campus in Longhua City, Shenzhen, China.
South China Morning Post | South China Morning Post | Getty Images
Apple supplier Foxconn reported a 72% rise in first-quarter profit, boosted by strong demand for AI servers, from low levels in the identical period last 12 months, but growth was slower than expected.
The Taiwanese company, the world’s largest maker of contract electronics, said net profit rose to T$22.01 billion (US$679 million) within the January-March quarter, compared with T$12.8 billion in the identical Period last 12 months when profits fell by T$17.3 billion attributable to write-offs related to the 34 percent stake in Japanese electronics maker Sharp Corp.
Although the profit missed the T$29.31 billion forecast by analysts, it was Foxconn’s third consecutive quarterly profit increase.
In the primary quarter, consumer electronics, including smartphones, accounted for 48% of sales, while cloud and networking products, including servers, contributed 28%.
Foxconn expects significant year-over-year revenue growth for the second quarter, broadly in step with previous forecasts, although smart computer electronics sales are expected to stay flat. It doesn’t provide numerical guidance.
The company, officially called Hon Hai Precision Industry Co Ltd, said in March that it expected a major increase in sales this 12 months attributable to booming demand for artificial intelligence servers.
Apple’s quarterly results and forecasts beat modest expectations this month, and CEO Tim Cook said revenue growth would return in the present quarter.
Foxconn shares have risen 65% up to now this 12 months on the intense AI outlook, far outpacing the 17% gain for the broader market.
