Taiwan's Foxconn, the world's largest contract electronics maker, is expected to report on Tuesday that first-quarter profit more than doubled on robust demand for artificial intelligence servers and after coming off a low base a year ago.
Last month, the company said first-quarter revenue slid 10%
from a year earlier but it has been bullish about 2024.
Net profit for January-March for Apple's top iPhone
assembler likely came in at T$29.3 billion ($904.6 million), according to an
LSEG consensus estimate of 15 analysts.
That would represent a 129% increase from the same period a
year ago when profit sagged after the company took a T$17.3 billion writedown
related to its 34% stake in Japanese electronics maker Sharp Corp. It would
also mark a third consecutive quarter of profit growth.
"Foxconn obviously is putting a lot of effort into its
AI servers. Targeted clients include HP and Dell," said Allen Huang, a
vice president at Mega International Investment Service.
Analysts at KGI Securities wrote in a client note that they
expected the first quarter to be Foxconn's sales trough for the year, with AI
cloud server sales continuing to see huge demand.
"As for 2025, we expect cloud sales to remain the major
sales and earnings growth driver," they added.
Underscoring Foxconn's rosy prospects, April sales hit a
record high for the month and the company, formally called Hon Hai Precision
Industry, has said it expects second-quarter revenue to grow year on year.
Foxconn does not provide numerical guidance.
Foxconn's shares have surged more than 60% so far in 2024,
far outperforming the broader market's 15% gain, thanks to its confident
outlook on AI.
Apple's quarterly results and forecast beat modest
expectations this month, and CEO Tim Cook said revenue growth would return in
the current quarter.
Foxconn holds its earnings call at 3.00 p.m. in Taipei
(0700GMT) on Tuesday, May 14.