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Foxconn Reiterates Q2 Revenue to Grow, Posts Record April Sales

Foxconn shareholders look at wafers on display after the annual shareholder meeting in New Taipei City, Taiwan May 31, 2023. REUTERS/Ann Wang/File Photo Purchase Licensing Rights
Foxconn shareholders look at wafers on display after the annual shareholder meeting in New Taipei City, Taiwan May 31, 2023. REUTERS/Ann Wang/File Photo Purchase Licensing Rights
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Foxconn Reiterates Q2 Revenue to Grow, Posts Record April Sales

Foxconn shareholders look at wafers on display after the annual shareholder meeting in New Taipei City, Taiwan May 31, 2023. REUTERS/Ann Wang/File Photo Purchase Licensing Rights
Foxconn shareholders look at wafers on display after the annual shareholder meeting in New Taipei City, Taiwan May 31, 2023. REUTERS/Ann Wang/File Photo Purchase Licensing Rights

Taiwan's Foxconn, the world's largest contract electronics maker and the biggest assembler of Apple's iPhone, reiterated on Sunday it expected a rise in second-quarter revenue, and reported record sales for the month of April. Foxconn (2317.TW), 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 added: "The operations outlook for the second quarter is expected to show both quarter-on-quarter and year-on-year growth".

The statement did not elaborate and the company does not give numerical guidance, Reuters reported.

The company, formally called Hon Hai Precision Industry Co Ltd, said April revenue reached T$510.9 billion ($15.83 billion), which it said was the highest figure on record for the same period and represented an on-year rise of 19%.

Revenue in its smart consumer electronics products, including smartphones, in April showed "significant growth" year-on-year, it said.

Strong artificial intelligence (AI) server demand also delivered "strong growth" in April on-year for its cloud and networking products segment, the company added.

The monthly sales data comes ahead of Foxconn's first-quarter earnings call on May 14.

Foxconn has previously reported that 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 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.

Apple's (AAPL.O) quarterly results and forecast beat modest expectations on Thursday, and CEO Tim Cook said revenue growth would return in the current quarter.

In March, 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 AI servers.

Foxconn's shares have surged almost 50% so far this year, compared with a 13% gain for the broader market (.TWII.)

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Apple Shares Fall as Tariff Costs to Add More Agony

FILE PHOTO: Customers walk past an Apple logo inside of an Apple store at Grand Central Station in New York, US, August 1, 2018. REUTERS/Lucas Jackson/File Photo
FILE PHOTO: Customers walk past an Apple logo inside of an Apple store at Grand Central Station in New York, US, August 1, 2018. REUTERS/Lucas Jackson/File Photo
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Apple Shares Fall as Tariff Costs to Add More Agony

FILE PHOTO: Customers walk past an Apple logo inside of an Apple store at Grand Central Station in New York, US, August 1, 2018. REUTERS/Lucas Jackson/File Photo
FILE PHOTO: Customers walk past an Apple logo inside of an Apple store at Grand Central Station in New York, US, August 1, 2018. REUTERS/Lucas Jackson/File Photo

Apple shares fell nearly 3% on Friday after the iPhone maker trimmed its share buyback program and CEO Tim Cook warned of additional tariff-related costs of about $900 million this quarter amid a raging Sino-US trade war.
The Cupertino, California-based company that makes over 90% of its products in China said it plans to shift production of iPhones to India to minimize the impact of President Donald Trump's trade war.
"It looks like Apple is progressing faster than expected with its move to shift production of US phones into the region (India)," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
Analysts at Wedbush echoed this view, referring to India as Apple's "life raft supply chain" as the company navigates through tariff turbulence.
Cook outlined how Apple has started to build up a stockpile of products so that the majority of its devices sold in the US this quarter will not come from China.
“Tim Cook did his best to reassure investors on last night’s earnings call, but many likely came away still wanting more clarity about what lies beyond June," Matt said, adding that the $900 million hit to profit turned out to be smaller than many had feared.
Apple, which has been grappling with increased competition in key market China from rivals like Huawei due to slower rollouts of AI features, was already in troubled waters before the tariffs hit.
"The question for investors is what can replace China for Apple? This is not an easy question to answer and could threaten the long-term trajectory of Apple’s growth plan," said Kathleen Brooks, research director at XTB.
Despite electronics being exempted from US.President Donald Trump's slew of import tariffs so far, Washington has signaled that some levies could be imposed in the coming weeks.
Big Tech peers Alphabet, Microsoft and Meta Platforms beat quarterly estimates aided by artificial intelligence, while Amazon.com's cloud revenue growth fell short of revenue expectations.
These results were in stark contrast to dour forecasts from consumer electronics companies that are more exposed to tightening consumer budgets - chipmakers Qualcomm, Samsung Electronics, and Intel.
Apple shares lost about 15% so far this year. That compares with a 2.3% fall in Meta, and a nearly 1% rise in Microsoft.
Apple's 12-month forward price-to-earnings ratio is 27.63, compared with Microsoft's 28.64 and Meta's 21.48.