Foxconn Posts Profit Rise, Sees Better Year Ahead — Update
By Kosaku Narioka
Foxconn Technology Group sees a better outlook for its business this year, it said after reporting a rise in fourth-quarter profit as margins improved despite a fall in revenue.
The Taiwan-based electronics maker known for assembling Apple's iPhones said Thursday that net profit rose 33% from a year earlier to 53.145 billion New Taiwan dollars (US$1.69 billion) for the final three months of 2023. That beat the estimate of NT$44.89 billion in a poll of analysts by S&P Global Market Intelligence.
Fourth-quarter revenue fell 5.7% to NT$1.852 trillion due to lackluster demand for cloud and networking products, and a slowing personal-computer market. Revenue for consumer electronics was largely flat due to softer market demand.
Foxconn, formally known as Hon Hai Precision Industry, said its operating-profit margin improved to 2.64% in the fourth quarter from 2.25% during the same period a year earlier. Margins had deteriorated in the year-earlier period as Covid-19 outbreaks affected some of its operations in China.
The company said it expects business at its consumer-electronics segment to be largely flat this year compared to 2023, though its overall business is expected to improve thanks partly to a stronger performance by its cloud and networking business.
Foxconn has said that revenue for the first two months of 2024 dropped 18% to NT$874.6 billion due to lukewarm market demand for personal computers. A higher base for consumer electronics revenue was also a factor.
The company has been taking steps in recent years to diversify its lines of businesses to include electric vehicles and artificial intelligence. It has also sought to expand production in countries like India, amid diplomatic tensions between the U.S. and China, and after the pandemic disrupted its production in the world's second-largest economy.
Foxconn said that it started delivering its Model C electric vehicles to customers this quarter.
The company had said in October that it would expand its partnership with chip-maker Nvidia to develop a new class of data centers that can power AI services.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
(END) Dow Jones Newswires
March 14, 2024 03:47 ET (07:47 GMT)
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