Foxconn factory park located in Longhua Town, Shenzhen, China.
South China Morning Post | South China Morning Post | Getty Images
Apple supplier Foxconn reported first-quarter profit growth of 72%, thanks to strong demand for artificial intelligence servers and a lower base than the same period last year, but the growth was lower than expected.
The Taiwanese company, the world’s largest maker of electronic contracts, said net profit in the January-March quarter rose to NT$22.01 billion ($679 million) from NT$12.8 billion a year earlier, when profit fell by NT$173. billion NT dollars.
Although profits fell short of analysts’ forecasts of NT$29.31 billion, this was Foxconn’s third consecutive quarter of profit growth.
In the first quarter, consumer electronics products including smartphones accounted for 48% of its revenue, while cloud and network products including servers contributed 28%.
Foxconn said it expects second-quarter revenue to increase significantly from the same period last year, basically consistent with previous guidance, with revenue from smart computer electronics products likely to remain flat. It does not provide numerical guidance.
The company, formally known as Hon Hai Precision Industry Co., said in March it expected revenue to grow significantly this year due to booming demand for artificial intelligence servers.
Apple’s quarterly results and forecasts this month beat modest expectations, and Chief Executive Officer Tim Cook said revenue would return to growth this quarter.
Driven by its optimistic outlook for artificial intelligence, Foxconn’s shares have risen 65% so far this year, far outpacing the broader market’s 17% gain.
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