Foxconn Shares Rise Sharply on Record Second-Quarter Revenue
By Sherry Qin
Foxconn Technology Group's shares rose sharply after it posted record second-quarter revenue thanks to the boom in demand for artificial-intelligence servers and forecast more growth in the second half of the year.
The world's largest contract electronics manufacturer's shares gained 4.9% to 225 new Taiwan dollars early Monday. They have more than doubled this year.
Foxconn, formally known as Hon Hai Precision Industry, said after market closed Friday that its revenue in June was NT$490.725 billion (US$15.14 billion), up 16% compared with the same period a year earlier. It added that second-quarter revenue at NT$1.552 trillion was a record high for the quarter and beat its expectations.
Foxconn attributed its strong June performance to its cloud and networking products segment amid strong demand for AI servers.
The iPhone assembler has been taking steps in recent years to diversify its businesses to include electric vehicles and AI servers, while expanding production to countries such as India to reduce its reliance on China.
The clouds and service segment, which made up 28% of Foxconn's revenue in the first quarter, will comprise a more significant share of overall revenue by 2025, Foxconn spokesperson James Wu said during a call after its first-quarter results in May.
The shift in Foxconn's revenue toward the networking segment should drive incremental revenue growth and support a re-rating of its shares' valuations, Daiwa analysts Sheng Cheng and Tim Hsu said in a recent research note.
The company expects its operation to "gradually gain momentum" as it enters its peak season in the second half of the year. It expects third-quarter revenue to growth on both an on-quarter and on-year basis.
Foxconn is expected to report its full second-quarter results on August 14.
Write to Sherry Qin at sherry.qin@wsj.com
(END) Dow Jones Newswires
July 07, 2024 23:25 ET (03:25 GMT)
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