Foxconn, a major iPhone assembler for Apple Inc, reported a 13.8% year-on-year drop in second quarter revenue to $14.9 billion. The decline in revenue was primarily attributed to a slowdown in demand for smartphones and other consumer electronics. However, the company remains hopeful for a rebound in the third quarter, anticipating increased demand for products like laptops and servers.
Following the announcement of the results, Foxconn’s shares in Taipei trading increased by 1.8%.
Here are some key takeaways from Foxconn’s Q2 results:
- Revenue decreased by 13.8% year-on-year, reaching $14.9 billion.
- Net income experienced a 29.5% year-on-year decline, amounting to $1.1 billion.
- Sales of smartphones had the greatest negative impact on revenue, dropping by 20% compared to the previous year.
- The laptop and server businesses demonstrated growth during the quarter.
- Foxconn expects a revenue rebound in the third quarter, fueled by increased demand for laptops and servers.
The decline in Foxconn’s Q2 revenue can be attributed to various factors affecting the global smartphone market. Forecasts indicate that the market is projected to grow by only 2% in 2023, a significant slowdown from the 5% growth observed in 2022. This deceleration is influenced by factors such as the ongoing chip shortage, the war in Ukraine, and rising inflation.
Despite the challenges faced, Foxconn maintains an optimistic outlook for the future. The company anticipates a revenue rebound in the third quarter, as businesses and consumers upgrade their equipment, leading to increased demand for products such as laptops and servers. Additionally, Foxconn is benefiting from strong demand for its electric vehicle components.
- Overall, while Foxconn’s Q2 results were disappointing, the company remains positive about its revenue prospects for the second half of the year.
