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Foxconn's Q1 Earnings Will Rise From A Low Base As Growth Is Powered By AI

Foxconn's Q1 Earnings Will Rise From A Low Base As Growth Is Powered By AI
The largest contract electronics manufacturer in the world, Foxconn, based in Taiwan, is anticipated to release its first-quarter earnings results on Tuesday. The company attributed the strong demand for its AI servers to the profit more than doubling from a year earlier.
The firm said this month that first-quarter revenue decreased 10% from the same period last year, but it remained optimistic about 2024.
The leading iPhone assembler for Apple is estimated by 15 experts to have had a net profit of T$29.3 billion ($904.6 million) for the January-March quarter.
That would be a 129% rise over the same time last year, when the company's profit declined due to a T$17.3 billion write-down related to its 34% ownership in Sharp Corp., a Japanese electronics manufacturer. Additionally, it would be the third straight quarter of earnings growth.
It's clear that Foxconn is working hard to improve its AI servers. Dell and HP are among the targeted clients, according to Mega International Investment Service vice president Allen Huang.
In a client note, analysts at KGI Securities predicted that Foxconn's sales for the year will peak in the first quarter, despite the continued high demand for AI cloud servers.
"As for 2025, we expect cloud sales to remain the major sales and earnings growth driver," they stated.
Sales in April reached a record high, highlighting Foxconn's optimistic outlook. The business, formerly known as Hon Hai Precision Industry, has stated that it anticipates growing revenue in the second quarter of the year. Foxconn doesn't offer quantitative advice.
Thanks to its optimistic stance on AI, Foxconn's shares have increased by more than 60% so far in 2024, far exceeding the 15% gain made by the entire market.
This month, Apple outperformed modest forecasts for its quarterly results and outlook, and CEO Tim Cook predicted that revenue growth will resume in the current quarter.
On Tuesday, May 14, Foxconn will host its results call in Taipei.

Christopher J. Mitchell

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