Foxconn expected to post strong Q1 profit growth on AI server demand

TAIPEI (Reuters) -Taiwan’s Foxconn, the world’s largest contract electronics maker, is expected to report on Wednesday that first-quarter profit leapt 72% on continued strong demand for artificial intelligence servers.

Net profit for January-March for Apple’s top iPhone assembler and Nvidia’s server maker likely came in at T$37.8 billion ($1.25 billion), according to an LSEG consensus estimate of 13 analysts, versus T$22.01 billion a year earlier.

Foxconn, formally called Hon Hai Precision Industry, said last month that its first-quarter revenue jumped 24.2% to a record for that quarter on strong sales of AI servers.

But global trade uncertainty could dim the prospects for its outlook this year, as it has a major manufacturing presence in China, though Washington and Beijing on Monday agreed to slash steep tariffs for at least 90 days.

Most of the iPhones it makes for Apple are assembled in China. Foxconn is also building a large manufacturing facility in Mexico – another target of U.S. President Donald Trump’s tariffs – to produce AI servers for Nvidia.

In its April sales report, Foxconn said while the second quarter should see on-year growth – the company does not provide numerical guidance – the impact of “evolving global political and economic conditions” would need continued close monitoring.

Foxconn has also been looking to expand its footprint in electric vehicles, which the company sees as a major future growth generator.

Japanese automaker Mitsubishi Motors and Foxconn subsidiary Foxtron Vehicle Technologies last week announced the signing of a memorandum of understanding for the supply of an electric vehicle model.

Foxconn has previously said it would consider taking a stake in Nissan for cooperation. Japan’s third-biggest automaker is striving to make its business leaner and more resilient after weak sales in China and its biggest market the United States.

Foxconn holds its earnings call at 3 p.m. (0700 GMT) in Taipei on Wednesday, where it will also update its outlook for the year.

Foxconn’s shares have fallen 14% so far this year, hit by concerns about U.S. trade policy, compared with a 7% drop for the broader Taiwan index.

($1 = 30.3070 Taiwan dollars)

(Reporting by Ben Blanchard; Editing by Christopher Cushing)