Apple supplier Foxconn posts 9% fall in first-quarter revenue

Apple iPhone manufacturer Foxconn on Friday posted a dip of 9.6% in revenue for the first quarter of 2024, compared with the same period last year.

The company, which trades as Hon Hai Precision Industry in Taiwan, recorded first-quarter revenue of 1.32 trillion New Taiwan dollars ($41.2 billion), which was also 28.58% lower compared with the fourth quarter of last year. It was also below economists’ expectations in a poll by LSEG, formerly known as Refinitiv.

The company still expects revenue to grow in the second quarter, despite noting that it “remains a traditional off-peak season.”

Foxconn shares were down 1.4% by the market close in Taiwan on Friday, before the release of the company’s figures at 15:30 p.m. local Taiwan time.

The first quarter is typically a quiet one for smartphone parts manufacturers, as consumer appetite for handsets tends to wane. In the fourth quarter, tech suppliers often race to supply smartphones, tablets and other electronics for tech giants like Apple, to satisfy demand over the holiday period.

There is currently no available data for smartphone shipments in the first quarter of 2024.

Last year, overall shipments declined 3.2%, according to Counterpoint Research, to 1.17 billion units.

Foxconn said that cloud and networking products were a bright spot for the Taiwanese technology giant, and that it saw significant growth in the segment.

The company saw “strong customers’ pull-in for the cloud segment, offsetting negative impact from inventory digestion in networking products,” it said.

Foxconn is increasingly being viewed as a beneficiary of the recent buzz surrounding artificial intelligence. Its stock has risen 14% in the past 12 months.

However, it lags AI chipmaking grandee Nvidia, which has seen shares more than triple in the same timeframe.

Foxconn has gained momentum of late, though, with its shares up nearly 21% year to date.

Foxconn makes enterprise servers for AI applications. The cloud is a key technology powering today’s advanced generative AI.

In a March investor update, Foxconn put out a bullish forecast for revenue saying it expects a significant rise boosted by booming demand for AI servers.

The company is expected to hold its next earnings call on May 14.

Last year, Foxconn and chipmaking powerhouse Nvidia said they were teaming up on the development of “AI factories,” which they call a new class of data center that uses Nvidia chips to power a “wide range” of applications, including training autonomous vehicles, robotics platforms and large language models.