Foxconn Reports Record Q3 Profit Driven by Surging AI Server Demand

Foxconn sees net profit rise 14% in Q3 on the back of strong demand for AI servers

The company said that the cumulative revenue of AI servers in the first three quarters of this year grew more than 200% compared to the same period last year, and general server revenue also grew by more than 20%.Taiwanese contract manufacturer Foxconn saw its net profit increase 14% in the third quarter to touch $1.5 billion on the back of strong demand for its AI servers. The company's third quarter revenue, operating profit and net profit all hit a record high for the period. As part of its 2024 guidance, the firm which is a key supplier to Apple and Nvidia indicated that it expects "significant" sales growth and forecasted that AI servers would account for 50% of its total server revenue next year in 2025, making it one of the most important levers of growth for the company. The company said that the cumulative revenue of AI servers in the first three quarters of this year grew more than 200% compared to the same period last year, and general server revenue also grew by more than 20%. "Looking ahead to operating performance in the fourth quarter, in addition to the traditional peak season, the well-performing smart consumer electronics product segment is expected to show strong quarter-on-quarter growth; in terms of cloud and networking products, the demand for AI servers is strong," Foxconn said in a statement. In the July-September quarter, the company also said its revenue was up 20% from a year earlier while gross profit increased 12% and operating profit climbed 19% during this period. Foxconn Chairman Young Liu said there were five operating pillars for the company - artificial intelligence, three major platforms (Smart Manufacturing, Smart EV, Smart City) and semiconductors. He said 2025 will be the "AI Year" for the Group and that he was optimistic that AI will be the top growth driver for the Group. It said that the company will focus on becoming a 'technology manufacturing platform service company' based on the foundation of its longstanding manufacturing services, plus its three major platform solutions, including Smart Manufacturing, Smart EV, and Smart City. Commenting on the impact that the US presidential election would have on the company's operations, Chairman Liu said that as a multinational enterprise, the Group was not concerned about the election itself, but is looking at factors such as investment policy, environment and business opportunities. He said that Foxconn has seen at least 11 presidential election cycles since it started operating in America. US President-elect Donald Trump has threatened to put a 10% tariff on all US imports and a 60% levy on Chinese-made products, a move that could impact Foxconn and its key client Apple as their factory in Zhengzhou is a major iPhone assembly location. "The overall outlook for significant growth is unchanged, although the visibility is better than in August," the company said. "Among the main products, the growth of cloud and networking products is even stronger, while components and other products are also performing strongly. For computing products, the full-year outlook for this segment has been raised to significant growth due to the effects of new products."

Foxconn Posts Better-Than-Expected Profit on AI Server Sales

Foxconn Technology Group reported better-than-expected profit for the third quarter as the artificial-intelligence boom drove demand for its AI servers. The world's largest contract electronics maker said Thursday that its net profit was 49.325 billion New Taiwan dollars, equivalent to US$1.52 billion, up 14% from a year earlier. That beat the NT$46.09 billion estimate of analysts polled by FactSet. Revenue rose 20% to NT$1.855 trillion, a record for the period, supported by strong AI server demand. The Taiwanese company, formally known as Hon Hai Precision Industry, has been taking steps in recent years to diversify its lines of business. Known for assembling iPhones for Apple, among other things, Foxconn now plays an increasingly important role in building AI servers for U.S. tech giants such as Amazon and Nvidia. Foxconn's cloud and networking business is its second-biggest source of revenue after consumer electronics. The division, which includes its AI servers, accounted for 32% of the company's overall revenue in the third quarter. Foxconn said it expects its AI-server shipments to grow sequentially and account for more than 50% of total server revenue in 2025. Consumer electronics sales, mainly from iPhones, were flat from a year earlier, in line with its previous guidance. Thanks to the AI boom, Foxconn's stock has doubled this year despite dropping more than 10% in the third quarter as renewed fears about a slowing U.S. economy fueled a global selloff.

Foxconn Profit Beats on Robust AI Server Demand -- Update

Foxconn Technology Group reported better-than-expected profit for the third quarter, thanks to continued high demand for AI-related hardware, the latest sign that its recent focus is paying off. The Taiwanese company, formally known as Hon Hai Precision Industry, has been taking steps in recent years to diversify its lines of business, which now include servers and electric vehicles. Known for assembling iPhones for Apple, among other things, Foxconn is playing an increasingly important role in building AI servers for U.S. tech giants such as Amazon and Nvidia. The world's largest contract electronics maker on Thursday said its third-quarter net profit rose 14% to 49.325 billion New Taiwan dollars, equivalent to US$1.52 billion, beating analysts' expectations. Revenue rose 20% to NT$1.855 trillion, a record for the period. AI-server sales grew over 200% in the first nine months of the year and are expected to be the biggest driver of Foxconn's business in 2025, Chairman Young Liu said during the earnings call. Foxconn's cloud and networking business, which includes its AI servers, is its second-biggest source of revenue after consumer electronics. The division's contribution has risen steadily over the past quarters, accounting for 32% of overall revenue in the third quarter. The company said it expects its AI-server shipments to grow sequentially and account for more than 50% of total server revenue in 2025, up from around 40% currently, as the AI industry enters a period of fast growth. Liu said demand for Nvidia's GB200 servers is "insane," reiterating that the company will start shipping a small number of the servers in the final quarter of the year, with large-volume shipments in 2025. At an event in October, Foxconn said it was building the world's largest GB200 manufacturing facility in Mexico to meet the strong demand. Consumer electronics sales, mainly from iPhones, were flat from a year earlier, in line with its previous guidance. Thanks to the AI boom, Foxconn's stock has doubled this year despite dropping more than 10% in the third quarter as renewed fears about a slowing U.S. economy fueled a global selloff.

Major Apple supplier Foxconn expected to report strong Q3 results on AI boom

TAIPEI (Reuters) - Taiwan's Foxconn, the world's largest contract electronics maker, is expected to report on Thursday that third-quarter profit rose 7% year-on-year on robust demand for artificial intelligence servers. Last month, the company said third-quarter revenue jumped 20% from a year earlier, beating expectations to post its highest-ever revenue for that quarter on strong sales of AI servers. Net profit for July-September for Apple's top iPhone assembler likely came in at T$46.3 billion ($1.43 billion), according to an LSEG consensus estimate of 14 analysts. That would represent a 7.4% increase from the same period a year ago. It would also mark a fifth consecutive quarter of profit growth. Foxconn said last month it was building in Mexico the world's largest manufacturing facility for bundling Nvidia's GB200 superchips, a key component of the U.S. firm's next-generation Blackwell family computing platform. Underscoring Foxconn's rosy prospects, October sales hit a record high for the month and the company, formally called Hon Hai Precision Industry, has said it expects fourth-quarter revenue to grow year-on-year. It does not provide numerical guidance. Foxconn holds its earnings call at 3.00 p.m. in Taipei (0700GMT) on Thursday, where it will also update its outlook for the rest of the year. Foxconn's shares have surged more than 100% so far in 2024, far outperforming the broader market's 28% gain, thanks to its confident outlook on AI. (Reporting by Ben Blanchard; Editing by Lincoln Feast.)

IPhone Maker Hon Hai's Profit Beats Estimates On AI Demand

Key iPhone assembler Hon Hai Precision Industry Co. reported a stronger-than-expected quarterly profit on persistent demand for servers powering AI applications. The company, also known as Foxconn, said on Thursday net income in the September quarter was NT$49.3 billion ($1.5 billion), beating an average estimate of NT$45.7 billion. The Taiwanese assembler previously said quarterly revenue grew 20% to a record NT$1.85 trillion, aided by solid orders for servers containing Nvidia Corp.'s cutting-edge chips.

Apple iPhone maker Foxconn set to see Q3 profits increase By Proactive Investors

Proactive Investors - Foxconn (SS:601138), the contract electronics manufacturer and a primary supplier for Apple (NASDAQ:AAPL), is projected to report strong third-quarter financial results, fuelled by demand growth in artificial intelligence. It told investors ahead of an earnings call that net profit had increased by 7% in the period. According to Reuters, the consensus figure is $1.43 billion. This boost is largely attributed to increased production of AI servers and components, areas in which Foxconn has been expanding its investments to capitalise on rising interest in this new wave of technologies. Analysts anticipate Foxconn's focus on AI-related products will help offset slower consumer electronics sales, as global economic challenges have tempered demand for items like smartphones and computers. Foxconn's efforts in diversifying its business to include more advanced tech have become crucial for navigating market shifts and sustaining its growth.

Apple's Key Supplier Foxconn's Gross Profit Hit 7 Year High In Q3, Aims To Expand AI Capabilities By Next Year - Hon Hai Precision (OTC:HNHPF)

Profit margins improve across the board.Revenue decreased on an annual basis.AI to be the main focus for the next year. Apple Inc.'s AAPL Taiwan-based supplier Foxconn HNHPF reported its third-quarter results on Thursday. The company, also known as Hon Hai Precision Industry, said its profit margins improved across the board. According to the company's press release, its gross profit margin hit a quarterly record high not seen since 2017. Net profit attributable to owners of the parent company in the third quarter grew by 31% sequentially and 11% annually to NT$43.1 billion or $1.3 billion. Gross profit margin and operating profit margin also displayed improvement on a sequential and annual basis. With an earnings per share at NT$3.11 or $0.095, the company reported revenue of NT$1.5432 or $47.3 billion indicating a quarterly increase of 18% but a 12% decrease year-on-year. Also read: Cathie Wood's Ark Invest Says Energy Bottlenecks Can't Stop AI Growth: Companies Could Go Partially Off-Grid What Happened: Chairman and Chief Executive Officer, Young Liu said that the six operational pillars outlined at the beginning of this year, ranging from information and communications technology, and new business development to global footprint and ESG practice were implemented according to plan, despite a few challenges. Liu also highlighted the important influencing factors to observe next year, which include, are monetary policy, inflation and the political and economic situation. "In addition, with global economic growth expected to slow down next year, the group will hold a relatively neutral view on the outlook for ICT in 2024. Hon Hai will do its best to maintain operational stability, meet customer needs, and leverage the company's strengths," he added. Also read: Apple's Smart Camera Coming In 2026, Cupertino Eyeing 'Tens of Millions' In Annual Shipments, Says Top Supply Chain Analyst Why It Matters: "Hon Hai is transforming from a manufacturing service company into a platform solution company," added Liu. The company's proposed focus areas for the future include developing platforms for smart cities, smart manufacturing and smart electric vehicles. With the ongoing artificial intelligence boom, the company said that it will focus on developing its three major platforms powered by AI factories. The AI factories will analyze a large amount of data and generate various new application content or solutions through self-learning. On the electric vehicle front, the company in its press release said that it has a total of 51 projects in progress, of which 23 are in the discussion and development stage involving 14 potential customers. Read next: AI Capabilities Plateauing, Say Andreessen Horowitz Founders, Echoing Concerns Of OpenAI Co-Founder Ilya Sutskever Image via Shutterstock Market News and Data brought to you by Benzinga APIs