Foxconn, an Apple supplier, announced a 72% increase in first-quarter profit, attributed to robust demand for AI servers and a rebound from a low base in the previous year. However, the growth fell short of expectations.
The Taiwanese conglomerate, renowned as the world’s largest contract electronics manufacturer, disclosed that net profit for the January-March period surged to T$22.01 billion ($679 million) from T$12.8 billion in the same quarter last year.
Notably, the previous year’s earnings were impacted by a T$17.3 billion write-down linked to its 34% stake in Japanese electronics firm Sharp Corp.
Despite missing analysts’ forecast of T$29.31 billion, this marks Foxconn’s third consecutive quarterly profit increase.
In the first quarter, consumer electronics, such as smartphones, contributed 48% of its revenue, while cloud and networking products, including servers, accounted for 28%.
Foxconn anticipates significant revenue growth in the second quarter compared to the previous year, aligning with previous guidance.
However, revenue for smart computer electronics is expected to remain stable. The company refrains from providing numerical guidance.
In March, Foxconn projected a substantial revenue increase for the year driven by surging demand for artificial intelligence servers, echoing Apple’s upbeat quarterly results and forecast earlier this month. Apple CEO Tim Cook expressed confidence in revenue growth for the current quarter.
Foxconn’s shares have surged by 65% year-to-date, propelled by optimistic prospects in the AI sector, surpassing the broader market’s 17% gain.
