Proactive Investors - Foxconn, Apple Inc (NASDAQ:AAPL, ETR:APC)'s iPhone manufacturer, expects its sales to rise in the current quarter after sales for the March quarter failed to rebound as much as expected in what is a typically quiet period for smartphone parts manufacturers.
The Taiwan-based company, which trades as Hon Hai Precision Industry, posted first quarter revenue of New Taiwan (NT) $1.32 trillion (US$41.2 billion).
This marked a 9.6% drop from the year-ago quarter and a 28.6% decrease from the previous quarter.
However, Foxconn projected revenue growth for the second quarter, while noting that this also “remains a traditional off-peak season.”
Wedbush analysts noted that Foxconn’s March sales did rebound but not enough to meet the consensus analyst estimate.
They noted that sales for March were up 27% month-over-month and 12% year-over-year with strength seemingly driven by servers for AI applications and a pickup in smart consumer electronics, namely iPhones.
“But the rebound was not enough to match Street expectations for the quarter with Foxconn coming in 5% shy of prior consensus estimates as March quarterly sales fell 10% year-over-year,” they wrote.
The analysts wrote that they see limited takeaways from the quarter in part given difficult year-over-year comparisons due to COVID-related shutdowns in China in 2023 that skew comparisons.
“Perhaps our only conclusion being AI server demand remains strong as Cloud and Networking Product growth was the one segment that grew year-over-year, with this segment also presumably the growth engine behind Foxconn's more constructive outlook for the second quarter,” they commented.