Nvidia supplier Foxconn’s profit surges; outlook clouded by tariffs
Taiwan’s Foxconn (SS:601138), the world’s largest contract electronics maker, posted a 91% leap in first-quarter profit and beat the market forecast on strong demand for artificial intelligence servers, but gave a more conservative full-year outlook, News.az reports citing Investing.
Net profit for January-March for Apple (NASDAQ:AAPL)’s top iPhone assembler and Nvidia (NASDAQ:NVDA)’s server maker came in at T$42.12 billion ($1.39 billion), versus the T$37.8 billion average of 13 analyst estimates compiled by LSEG.
Foxconn, formally Hon Hai (TW:2317) Precision Industry, last month said January-March revenue jumped 24.2% to a record for that quarter on strong sales of AI servers.
In an earnings report, Foxconn said it should see significant on-year growth in the second quarter, with high double-digit growth year-on-year for AI servers and an accelerating volume production ramp-up.
But for full-year revenue, it forecast significant on-year growth, downgrading the outlook from a previous prediction of strong growth. It did not elaborate and the company does not provide numerical guidance.
A Sino-U.S. trade spat could dim prospects for Foxconn’s outlook this year, as it has a major manufacturing presence in China, though Washington and Beijing on Monday agreed to slash tariffs for at least 90 days.
Subsidiary Foxtron Vehicle Technologies and Japanese automaker Mitsubishi Motors (OTC:MMTOF) last week announced the signing of a memorandum of understanding for the supply of an electric vehicle model.
Foxconn has previously said it would consider taking a stake in Nissan (OTC:NSANY) for cooperation. Japan’s third-biggest automaker is striving to make its business leaner and more resilient after weak sales in China and its biggest market the United States.
Foxconn holds its earnings call at 3 p.m. (0700 GMT) in Taipei on Wednesday, where it will also update its outlook for the year.
Its shares have fallen 11.4% so far this year, hit by concerns about U.S. trade policy, compared with a 5.4% decline for the broader Taiwan index.
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