Foxconn's profit lags estimates as it forecasts strong revenue growth

By Wen-Yee Lee, Faith Hung and Ben Blanchard

TAIPEI, March 16 (Reuters) - Taiwan's Foxconn, the world's largest declaration electronics maker, said connected Monday it expected beardown gross maturation successful the archetypal 4th and the full of this year, adjacent arsenic it ‌posted a autumn of 2% successful quarterly profit, lagging estimates.

The exertion giant, Nvidia's biggest server shaper and Apple's apical iPhone assembler, ‌blamed a emergence successful its taxation complaint for the drop, which came contempt robust planetary request for AI products and a leap of 22% successful fourth-quarter revenue.

Foxconn's guidance for ​both archetypal 4th and afloat twelvemonth gross are for "strong growth", the highest outlook it tin give, arsenic the institution does not supply a numeric outlook.

"Artificial Intelligence's beardown maturation was not conscionable for this past twelvemonth oregon two," Chairman Young Liu told an net call. "It volition past done the adjacent 2 to 3 years."

He added, "Our large customers expect the size of the AI manufacture to deed $1 trillion implicit the adjacent 2 to 3 years."

It is the ‌first clip the company, which generates a important stock ⁠of gross from AI servers, has fixed an outlook for the afloat twelvemonth 2026.

Growth would beryllium driven by sustained beardown request for AI servers, successful which its marketplace stock would scope 40%, it said.

Despite predicting a bully ⁠2026, Liu pointed to outer issues beyond Foxconn's control.

"The biggest outer situation this year, successful my view, is inactive the planetary governmental and economical situation, particularly the warfare successful the Middle East," helium said, without elaborating.

The escalating struggle successful the Middle East has rattled planetary markets and fuelled concerns implicit proviso concatenation ​risks.

Foxconn ​has been riding a information centre roar arsenic unreality computing firms specified arsenic ​Amazon, Microsoft and Alphabet's Google walk billions of dollars to ‌expand AI infrastructure and probe capacity.

QUARTERLY PROFIT LAGS FORECASTS

Foxconn's nett net for the play from October to December was T$45.21 cardinal ($1.42 billion), versus an LSEG statement estimation of T$63.86 billion.

The electronics elephantine said it besides expected first-quarter gross for astute user electronics to spot important maturation year-on-year, though it forecast a diminution successful the idiosyncratic machine sector.

"In the astute user electronics products segment, determination person been concerns astir representation shortages and terms increases," Liu said.

However, with its merchandise premix skewed toward higher-priced models, the Foxconn saw constricted impact, helium added.