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Hon Hai Reports Downturn in Revenue, Citing Seasonal and Holiday Impacts

Despite a significant drop in February sales, Hon Hai sees robust demand in cloud network products, with optimistic outlook for electric vehicle segment
Taiwan
f 2317.TW Blue Chip 150 Tech 350 OM 60
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Hon Hai Precision Industry Co., Ltd., also known as Foxconn, disclosed a noticeable decrease in its February revenue, recording NT$352.5 billion, which marks a 32.49% reduction from the previous month and a 12.33% fall on a year-over-year basis. The combined revenue for the initial two months of 2024 stood at NT$874.6 billion, reflecting a 17.67% year-over-year decline. The company attributes this downturn primarily to the reduced number of working days in February due to the Lunar New Year celebrations, particularly impacting the consumer electronics segment. However, server products related to cloud networks witnessed stronger demand, mitigating the overall revenue dip.

Looking ahead to the first quarter of 2024, Hon Hai anticipates a continuation of the seasonal slowdown, aligning with the trends observed over the past three years. The comparative high base from Q1 2023, post-pandemic production normalization, sets the stage for an expected year-on-year decrease in this quarter.

On the product front, all major categories experienced a monthly decline, largely due to the shorter working month. Year-over-year, the cloud network products stood out with significant growth, driven by robust customer demand. In contrast, consumer smart products and PC-related offerings faced challenges, with the latter affected by an ongoing lag in market demand recovery.

In a contrasting upbeat note, Hon Hai’s subsidiary, Honghua, showcased a remarkable performance, with February revenues soaring by 253.87% month-on-month and an astonishing 1,749.52% year-on-year, mainly propelled by strong sales in passenger cars and electric buses. The forward-looking statements for Q1 indicate a promising trajectory, especially in the passenger car segment, aligning with the escalating market demand and expected sequential delivery increases. This segment’s buoyancy provides a positive outlook amidst the broader revenue contractions faced by Hon Hai.

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