Foxconn Reports 12% Drop in Q3 2023 Revenue Amid Strategic Transformations

Foxconn, a prominent technology manufacturer, announced robust performance in the third quarter of 2023, with revenue reaching NT$1.5432 trillion, marking an 18 percent increase from the previous quarter.
Foxconn at a trade showHowever, this reflected a 12 percent decline compared to the same period last year. Despite the annual decrease, the company experienced positive growth in several key financial indicators.

Gross profit surged to NT$102.8 billion, up 23 percent quarter-on-quarter but down 5 percent year-on-year. Operating profit saw a significant increase of 49 percent from the previous quarter, reaching NT$46.2 billion, although it dropped by 5 percent year-on-year. Net profit followed suit, rising to NT$43.1 billion, showcasing a 31 percent increase from the previous quarter and an 11 percent increase compared to the same quarter last year.

Foxconn attributed its better-than-expected performance in the July-September quarter to operational improvements and anticipates further quarter-on-quarter growth in the final quarter of 2023.

Looking forward to 2024, the company maintains a neutral outlook, considering factors such as monetary policies, inflation, and the global political and economic landscape.

In the January-September period, Foxconn recorded revenue of NT$4.3101 trillion, reflecting an 8 percent year-on-year decrease. Gross profit fell 5 percent to NT$274.7 billion, operating profit decreased by 9 percent to NT$117.6 billion, and net profit declined by 12 percent to NT$89 billion. However, despite the decline, the company maintained respectable margins—6.37 percent in gross profit, 2.73 percent in operating profit, and 2.06 percent in net profit.

The company anticipates significant growth drivers in 2024, particularly in cloud servers, networking products, AI servers, and electric vehicles (EVs). Foxconn foresees substantial revenue contributions from its EV ventures, citing ongoing production of the MODEL T electric bus and the impending mass production of MODEL C. Additionally, expansion in component projects is expected to further bolster revenue.

Foxconn Chairman Liu emphasized the company’s transformation from a manufacturing service entity to a platform solution provider. Notably, the company unveiled three major platforms—smart city, smart manufacturing, and smart electric vehicles—outlined during Hon Hai Tech Day, aligning with their future development goals.

With 51 EV projects in progress, including discussions with 14 potential customers, Foxconn is aggressively pursuing its EV initiatives. Moreover, collaborations in cloud platforms, space computing, and satellite manufacturing indicate a foray into the B5G and new space sectors, focusing on low-Earth-orbit communication satellite systems.

Foxconn’s strategic shift towards platform solutions and its diversification into emerging technology sectors underline the company’s intent to evolve and innovate in a rapidly changing technological landscape.