Pictured here is the Foxconn factory in Zhengzhou on September 4, 2021.
VCG | China Optical Group | Getty Images
iPhone maker Foxconn on Friday reported a 9.6% drop in revenue for the first quarter of 2024, compared to the same period last year.
Company that trades as Hon Hai Precision Industry In Taiwan, first-quarter revenue was NT$1.32 trillion ($41.2 billion), which is also 28.58% lower than the fourth quarter of last year. It was also below expectations of economists in a poll by LSEG, formerly known as Refinitiv.
The company still expects revenue growth in the second quarter, though noting that it is “still a traditional off-peak season.”
Foxconn shares fell 1.4% at the market close in Taiwan on Friday, before the company's numbers were released at 15:30 pm local Taiwan time.
The first quarter is typically quiet for smartphone parts manufacturers, as consumer appetite for phones tends to wane. In the fourth quarter, technology suppliers often race to supply smartphones, tablets and other electronic devices to tech giants such as appleTo meet demand during the holiday period.
There is currently no data available for smartphone shipments in the first quarter of 2024.
Last year, total shipments fell 3.2%, according to Counterpoint Research, to 1.17 billion units.
Artificial intelligence in focus for investors
Foxconn said cloud and networking products have been a bright spot for the Taiwanese tech giant, and that it has seen significant growth in the sector.
The company said it has seen “strong customer traction for the cloud segment, offsetting the negative impact of inventory absorption in networking products.”
Foxconn is increasingly seen as a beneficiary of the recent hype surrounding artificial intelligence. Its shares are up 14% in the past 12 months.
However, it lags behind the AI chip industry Nvidiawhich saw shares more than triple in the same time frame.
Foxconn has been gaining momentum recently, with its shares up nearly 21% year to date.
Foxconn makes enterprise servers for AI applications. The cloud is a key technology that powers today's advanced generative AI.
In an update to investors in March, Foxconn set an upbeat revenue outlook, saying it expects a significant rise fueled by growing demand for AI servers.
The company is expected to hold its next earnings call on May 14.
Last year, Foxconn and chipmaker powerhouse Nvidia said they were collaborating on developing “AI factories,” which they call a new class of data centers that use Nvidia chips to power a “broad range” of applications, including training autonomous vehicles. Robotics platforms and large language models.
