Technology
Friday, January 5th, 2024 4:42 pm EDT
Key Points
Foxconn Reports Revenue Drop and Outlook for Q1 2024:
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- Apple supplier and primary iPhone assembler, Foxconn, disclosed a revenue drop for the final quarter of 2023, totaling NT $1.85 trillion ($59.7 billion), reflecting a 5.4% decline from the same period in the previous year. Foxconn attributes this downturn to weak or stagnant sales in its computing products, smart consumer electronics, and cloud and networking products. Additionally, the company’s December revenue experienced a significant year-over-year fall of 27%. Foxconn further anticipates a year-over-year decline in sales for the first quarter of 2024, signaling concerns about the immediate future.
Downgrades to Apple Stock Amid Softening iPhone Sales:
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- The outlook provided by Foxconn coincides with two recent downgrades to Apple’s stock earlier in the week. Both downgrades were prompted by observations of softening iPhone sales. Barclays analysts noted weaknesses in iPhone volumes and mix, as well as a lack of recovery in other Apple products such as Macs, iPads, and wearables. The analysts highlighted incrementally worse iPhone 15 data points from China and identified softness in developed markets. These downgrades had a consequential impact on shares of Foxconn and other Apple suppliers, including Taiwan Semiconductor Manufacturing Company.
Concerns About Handset Inventories and Apple’s Share Performance:
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- A subsequent downgrade issued by Piper Sandler expressed concerns about handset inventories entering the first half of 2024 and suggested that growth rates for unit sales may have peaked. Piper Sandler’s Harsh Kumar expects a recovery in the handset market sometime during the second half of 2024. The cumulative impact of these downgrades and concerns about Apple’s sales performance has led to a decline in Apple’s shares, which are down approximately 5% since the beginning of the year. The assessments and outlooks from key suppliers like Foxconn provide insights into broader market sentiments regarding Apple’s product sales and market dynamics.
Foxconn, the leading iPhone assembler and an Apple supplier, reported a revenue drop of 5.4% in the final quarter of 2023, totaling NT $1.85 trillion ($59.7 billion). The decrease is attributed to weak or flat sales in computing products, smart consumer electronics, and cloud and networking products, with December revenue falling 27% year over year. This announcement follows two recent downgrades to Apple stock, both citing softening iPhone sales. Barclays analysts noted weakness in iPhone volumes, mix, and a lack of rebound in Macs, iPads, and wearables. Piper Sandler also expressed concerns about handset inventories entering 1H24 and suggested a recovery in the handset market in the second half of 2024. The downgrades impacted shares of Foxconn and other Apple suppliers. Apple’s shares have fallen approximately 5% since the beginning of the year.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/01/05/apple-iphone-supplier-foxconn-expects-first-quarter-revenue-decline.html