Workers on the Foxconn factory campus in Longhua City, Shenzhen. 20JUL16 SCMP/Nora Tam (Photo by Nora Tam/South China Morning Post via Getty Images)
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Apple supplier Foxconn said Thursday it expects revenue to rise significantly in 2024 after a slow start to the year amid a boom in demand for AI servers, after reporting a fourth-quarter profit that beat market estimates .
The outlook has grown brighter since Foxconn Chairman Young Liu said in November that the world’s largest contract electronics manufacturer had “relatively conservative and neutral” expectations for 2024.
The Taiwanese company said October-December net profit rose 33% to NT$53.14 billion ($1.69 billion) from NT$40 billion in the same period a year earlier, thanks to strong demand for AI servers and strong sales during the peak of the year-end holiday season.
The profit beat LSEG SmartEstimate by NT$43.52 billion, which gives more weight to analyst forecasts that are more consistently accurate.
In the fourth quarter, consumer electronics, including smartphones, accounted for 58% of revenue, while cloud and networking products, including servers, contributed 20%.
Foxconn said it expects revenue for the first quarter to decline slightly from a year earlier, with revenue for smart computer electronics also likely to decline in the period.
The company, formally called Hon Hai Precision Industry Co Ltd, said it expects a slowdown in the first quarter of this year similar to that of the same period the previous three years.
However, revenue for 2024 is expected to become more and more significant every year.
The first quarter is traditionally quieter than the previous one, the season when Taiwanese technology companies race to supply smartphones, tablets and other electronics to major suppliers such as Apple for the year-end holiday period in Western markets.
Apple last month reported sales and profits that beat Wall Street estimates, fueled by growth in its iPhone business, although sales in China missed analysts’ targets.
Foxconn shares closed 0.4% higher on Thursday, ahead of the earnings release, compared to a flatter market.