TAIPEI (Reuters) -Taiwan’s Foxconn, the world’s largest contract electronics maker, posted a forecast-beating 17% rise in third-quarter profit on Wednesday, fuelled by the sustained strength in demand for AI servers that it expects to drive growth next year too.
Net profit for the July-September period for Nvidia’s biggest server maker and Apple’s top iPhone assembler was T$57.67 billion ($1.89 billion), higher than the consensus estimate of T$50.4 billion compiled by LSEG.
Foxconn, formally called Hon Hai Precision Industry, last month reported a forecast-beating third-quarter revenue on strong demand for AI products.
In its earnings report, Foxconn said it should see significant year-on-year revenue growth in the fourth quarter, with AI server revenue expected to increase quarter-on-quarter.
In the third quarter, revenue for its cloud and networking business, which includes AI servers, exceeded that from smart consumer electronics – such as iPhones – for the second quarter in a row.
For its full-year revenue, it also forecast significant year-on-year growth, in line with previous guidance given in August. It did not elaborate and the company does not provide numerical guidance for its outlook, whether full-year or quarterly.
Most of the iPhones Foxconn makes for Apple are assembled in China, but the bulk of those sold in the United States are now produced in India. The company is also building factories in Mexico and Texas to make AI servers for Nvidia.
Foxconn has also been looking to expand its footprint in electric vehicles, which the company sees as a major future growth generator, though that has not always gone smoothly.
In August, Foxconn said it had struck a deal to sell a former car factory at Lordstown, Ohio, for $375 million, including its machinery, that it purchased in 2022 to manufacture EVs.
Foxconn’s shares have surged 36% so far this year, outperforming the broader Taiwan index’s 21% gain.
Its shares closed up 1.8% on Wednesday ahead of the earnings release.
($1 = 30.5930 Taiwan dollars)
(Reporting by Wen-Yee Lee and Ben Blanchard; Editing by Muralikumar Anantharaman)
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