TAIPEI (Reuters) -Taiwan’s Foxconn, the world’s largest contract electronics maker, said on Wednesday quarterly profit leapt 91%, beating forecasts, thanks to strong demand for AI servers, although the outlook was overshadowed by tariff uncertainty.
Net profit for January-March for Apple’s top iPhone assembler and Nvidia’s <NVDA.O AI> server maker came in at T$42.12 billion ($1.39 billion), versus the T$37.8 billion average of 13 analyst estimates compiled by LSEG.
Foxconn, formally Hon Hai Precision Industry, last month said January-March revenue jumped 24.2% to a record for that quarter on strong sales of AI servers.
Chairman Young Liu said on an earnings call that U.S. tariffs will bring more challenges and his outlook for the full year was more cautious than previously.
A Sino-U.S. trade spat could dim prospects for Foxconn’s outlook this year, as it has a major manufacturing presence in China, though Washington and Beijing on Monday agreed to slash tariffs for at least 90 days.
The cheer over the temporary truce was tempered by caution, given a more permanent trade deal needs to be struck, while higher tariffs overall could still weigh on the global economy.
Most of the iPhones Foxconn 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 an earnings report, Foxconn said it should see significant on-year growth in the second quarter, with high double-digit growth year-on-year for AI servers and an accelerating volume production ramp-up.
The manufacturer does not provide numerical guidance.
Foxconn has been looking to expand its footprint in electric vehicles, which it sees as a major future growth generator.
Subsidiary Foxtron Vehicle Technologies and Japanese automaker Mitsubishi Motors 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.
Its shares have fallen 11.4% so far this year, hit by concerns about U.S. trade policy, compared with a 5.4% decline for the broader Taiwan index.
They closed up 3.2% on Wednesday ahead of the earnings call.
($1 = 30.2680 Taiwan dollars)
(Reporting by Ben Blanchard; Editing by Christopher Cushing)
