By
Tolu Ajiboye
November 14th, 2023
Foxconn expressed optimism about the upcoming third quarter, anticipating a brighter outlook as they approach the peak shopping season at the end of the year.
On Wednesday, July 5, Taiwan-based leading iPhone assembler Foxconn announced that its second-quarter (Q2) revenue dropped by 14% on the year-on-year timeline. Foxconn is one of the world’s largest contract electronics makers.
Foxconn in Q2
According to a statement by Foxconn, the company noted a decline in revenue for smart consumer electronics products, including smartphones, in the second quarter compared to the previous year. However, specific details were not provided.
The revenue for the April-June period stood at T$1.3 trillion ($41.76 billion), pretty much in line with the company’s expectations. For the last month of June 2023, the sales at Foxconn dropped by 19.7% year-on-year. However, the sales numbers stood at T$422.8 billion which makes it the second-highest figure by numbers for the month of June. In a statement recorded by Reuters, the company said:
“With the second half of the year peak season currently underway, operations will gradually ramp up. The outlook for the third quarter, which will be better than the second quarter, is expected to increase at an on quarter pace higher than seen in the previous two years. When compared to the pre-pandemic period, the growth rate is expected to be approximately on par.”
Foxconn Predicts Robust Sales for Q3
Traditionally, the first half of the year tends to be slower for tech manufacturers in Taiwan, as major electronics companies like Apple often release new products closer to the year-end holiday season. On August 14, Foxconn is set to report its second-quarter earnings.
In the first quarter, Foxconn experienced a significant decline in net profit, plunging by 56%, which was larger than anticipated. This marked their largest quarterly fall in three years. The decline was attributed to a $565 million write-off associated with their 34% stake in Japanese electronics maker Sharp Corp.
Foxconn expressed optimism about the upcoming third quarter, anticipating a brighter outlook as they approach the peak shopping season at the end of the year. Foxconn expects substantial growth in its AI server business driven by strong demand. As people increasingly rely on AI applications like ChatGPT, the need for AI servers is expanding. Foxconn forecasts a three-digit percent increase in the growth of its AI servers in 2023.
While Foxconn shares have seen an 8.6% increase this year, they have not performed as well as the broader Taiwan market, which has risen by 20.1%. On Wednesday, Foxconn shares closed down 1.4%, compared to a 0.5% drop in the broader market.