Foxconn Reports Mixed Results, Net Profits Fall By 10% Y-o-Y

• Foxconn’s revenue in the first quarter of FY24 rose 3.9% year-on-year to $74.14 billion.

•  The company anticipates declining consumer electronics demand for the full year ahead.

Apple’s supplier Hon Hai Precision Technology (Foxconn) reported mixed results, beating analysts’ estimates on the topline but reporting a 10% year-on-year decline on the bottom line.

The Taiwanese contract manufacturer said revenue in the first quarter of FY24 rose 3.9% year-on-year to $74.14 billion (511.85 billion Chinese yuan) for the full year, beating market estimates.

Foxconn warned the outlook for the second quarter was likely to fall on a quarter-on-quarter and year-on-year basis. In its earnings report, the company anticipated declining consumer electronics demand for the full year ahead.

The company had predicted last month that the revenue for the full year would be flat, as weak demand for consumer electronics would be offset by significant growth in computing, cloud, networking and component products.

Mirroring Apple’s estimates

Foxconn’s mixed results mirror Apple’s negative sentiment in its first-quarter 2023 results. The company anticipated double-digit declines in Mac and iPad sales for the quarter that ended March compared with the prior year. The company also said that the decline in iPhone sales in the current quarter would be lesser compared with the quarter that ended in December.

Last month Foxconn announced that it would build an iPhone parts plant on a 300-acre site near Bengaluru’s Kempegowda International Airport. 

Demand for electronics goods is witnessing a slump as global macroeconomic uncertainty has diminished discretionary income, which is in stark contrast to the rich profits reaped by companies during the pandemic up till 2021.