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Hon Hai Reports Mixed Financial Results for 2023, Anticipates Traditional Off-Season in Q1 2024

Despite a challenging year, Foxconn diverse product lines show resilience, with expectations of a seasonal downturn in early 2024
Taiwan
f 2317.TW Blue Chip 150 Tech 350
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Hon Hai Precision Industry Co., Ltd., also known as Foxconn, has reported a mixed financial performance for December 2023 and the fourth quarter of the same year. The company’s December revenue reached 460.1 billion yuan, marking a 29.21% decrease from the previous month and a 26.89% drop year-over-year. However, the fourth-quarter revenue showed a 20% increase from the previous quarter, despite a 5.4% year-over-year decline, totaling 1.8513 trillion yuan. For the entire year of 2023, Hon Hai’s self-financed revenue was 6.1596 trillion yuan, down by 6.98% from the previous year, ranking as the second-highest in its history for the same period.

Despite these declines, Hon Hai’s December performance exceeded market expectations. The company saw growth in all product lines except “computer terminal products” and “consumer smart products.” Notably, “components and other products” experienced a significant increase due to rising component sales, showing strong monthly growth. Similarly, “Cloud Network Products” displayed an increasing sales momentum, contributing to overall performance growth.

Looking at the fourth quarter of 2023, Hon Hai believes that its revenue has surpassed market forecasts. The quarter-over-quarter performance and synergy in “cloud network products” exceeded internal estimates. The annual performance across all product lines was better than anticipated. Both “components and other products” and “consumer smart products” saw strong quarterly growth, driven by increased component shipments. “Computer terminal products” maintained a steady performance, buoyed by consumer demand in the U.S. and Chinese markets.

For the full year of 2023, “components and other products” enjoyed growth from shipments of “consumer smart products” components and automotive electronics components. However, a decline in demand for non-main businesses led to a roughly flat year-on-year performance. The “consumer smart products” category faced a slight annual decline due to a high base period in the previous year. “Cloud network products” also saw a minor year-on-year decrease due to conservative customer demand, while “Computer terminal products” experienced a slight dip compared to the previous year, attributed to the slowdown in PC market demand.

Heading into 2024, Hon Hai anticipates its overall operations in the first quarter to enter the traditional off-season, expecting performance similar to the past three years. Furthermore, due to increased shipments in the first quarter of 2023 as factories resumed normal production post-pandemic, the comparison base period is higher. Consequently, Hon Hai predicts a year-on-year decline in operating performance for the first quarter of 2024. This outlook reflects the company’s cautious approach amidst global economic challenges and changing market dynamics.

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