Apple supplier Foxconn sees growth in Q2 after dip in Q1 revenue

TAIPEI (Reuters) – Taiwan’s Foxconn, the world’s largest contract electronics maker and the biggest assembler of Apple’s iPhone, said on Friday it expected a rise in second quarter revenue after the previous quarter underperformed market expectations.

The first quarter is traditionally quieter than the previous one, the season when Taiwan’s tech companies race to supply smartphones, tablets and other electronics to major vendors such as Apple for Western markets’ year-end holiday period.

Foxconn said in a statement that this year’s second quarter “remains a traditional off-peak season, and major products are entering a period of transition between old and new products”.

But it said the outlook for the second quarter would be for growth both quarter-on-quarter and year-on-year. It did not elaborate and the company does not give numerical guidance.

The company, formally called Hon Hai Precision Industry Co Ltd, said revenue last month reached T$447.54 billion ($13.96 billion), which it said was the second highest figure on record for the same period and represented an on-year rise of 11.8%.

For the first quarter, revenue slid 9.6% year-on-year to T$1.322 trillion, underperforming a T$1.401 trillion LSEG SmartEstimate, which gives greater weight to forecasts from analysts who are more consistently accurate.

The company said last month it expected first quarter revenue to slightly decline, and noted in its statement the first quarter revenue was in line with its outlook.

First quarter revenue in its smart consumer electronics products, including smartphones, declined year-on-year, which it blamed on a high base from last year when it was rushing to fulfil orders after a key factory in China’s Zhengzhou re-opened following COVID pandemic-related disruptions.

However, for cloud and networking products it said there was significant year-on-year growth in the first three months of the year, “with strong customers’ pull-in for the cloud segment”.

Last month, Foxconn adopted a far more bullish outlook for this year, saying on its fourth quarter earnings call that it expected a significant rise in revenue driven by booming demand for artificial intelligence servers.

Foxconn’s shares have surged 52% so far this year, compared with a 13% jump for the broader market.

The company holds its first quarter earnings calls on May 14.

($1 = 32.0590 Taiwan dollars)

(Reporting by Ben Blanchard; Editing by Muralikumar Anantharaman and Emelia Sithole-Matarise)