Apple supplier Foxconn announced on Thursday that it expects a significant increase in revenue in 2024, after a slow start to the year due to booming demand for AI servers. This announcement came after Foxconn posted fourth-quarter profit that beat market estimates. Foxconn Chairman Young Liu had previously said in November that the company had “relatively conservative and neutral” expectations for 2024. However, the outlook has now turned rosier.
For the period of October-December, the net profit of Foxconn surged 33% to T$53.14 billion ($1.69 billion), up from T$40 billion in the same period in the previous year. This was due to robust demand for AI servers and strong sales during the peak year-end holiday season. The profit beat the T$43.52 billion LSEG SmartEstimate, which gives greater weight to forecasts from analysts who are more consistently accurate. Revenue generated from consumer electronics, including smartphones, accounted for 58% of the total revenue in the fourth quarter, while cloud and networking products, including servers, contributed 20%.
Although the company expects a slight decline in revenue for the first quarter compared to the same period last year, it is optimistic about the future. It predicts a similar slowness in the first quarter of this year as in the previous three years. However, Foxconn anticipates that the revenue will increase significantly year-on-year in 2024.
The first quarter is usually quieter than the previous one, which is 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. In its last earnings report, Apple reported sales and profit that beat Wall Street estimates, powered by growth in its iPhone business. However, its China sales missed analysts’ targets. Foxconn’s shares closed up 0.4% on Thursday ahead of the earnings release, compared with a flat broader market (.TWII). ($1 = 31.5050 Taiwan dollars