Foxconn Expects Growth Stall in 2023

Hon Hai Precision (Foxconn) unveiled financial results for the final quarter of 2022 and the full year. The year set new records in revenue and net profit but Q4 has shown a slowdown.

Net profit in the final quarter of 2022 fell 10% year-on-year to TWD40 billion ($1.3 billion). Revenue reached NT$1.963 trillion, up 4% on-year; gross profit at NT$111.1 billion, fell 2% on-year. Operating net profit was down 16% in the last three months of 2022 to NT$44.2 billion. Gross profit margin, operating profit margin, and net profit margin were 5.66%, 2.25%, and 2.04%, respectively, compared with 6.03%, 2.79%, and 2.35% during the same three months a year ago, as pandemic-affected operations weighed on margins in the fourth quarter. EPS in the October-December quarter reached NT$2.88, down NT$0.32 from the year-ago period.

Net profit for 2022 totaled NT$141.5 billion, resulting in earnings per share of NT$10.21, a 15-year high. For the full year 2022, revenue reached an annual record of NT$6.627 trillion, up 11% from a year earlier; gross profit at NT$400.1 billion, rose 10% on-year; operating net profit at NT$173.8 billion, increased 17% on-year; and net profit at NT$141.5 billion, gained 2% on-year. Gross profit margin, operating profit margin, and net profit margin were 6.04%, 2.62%, and 2.13%, respectively, compared with 6.04%, 2.49%, and 2.32% in the previous year; despite the performance in margins, their absolute values increased. EPS for 2022 reached NT$10.21, an increase of NT$0.16 from a year ago.

Due to greater uncertainty in the global economic situation for 2023, the company's outlook for the whole year is neutral and flattish. Foxconn forecasts that the revenue from smart consumer electronics products will fall in 2023. In its 2022 earnings release, the company predicted modest full-year growth in its cloud and networks, computing products, and components and other products divisions. Foxconn forecast sales in Q1 and 2023 to be flat.