Foxconn posts 9.6% revenue decline in Q1

Foxconn, the company best known for assembling Apple's (AAPL) iPhones, reported that its first quarter revenue fell 9.6% from a year ago. Foxconn, which is formally known as Hon Hai Precision Industry (2317.TW, HNHPF), expects sales to grow in the current quarter.

in the video above, Yahoo Finance's Brad Smith and Seana Smith discuss the report.

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Editor's note: This article was written by Stephanie Mikulich

Video transcript

BRAD SMITH: Apple supplier Foxconn posted a 9.6% revenue dip in the first quarter, but remained confident that revenue will grow the second quarter. The company, which trades as Hon Hai Precision Industry in Taiwan, it cites that the early part of the year is traditionally a downtime for the smartphone suppliers post holiday season. One of the huge things I think as well is being able to check in on Apple shares and the demand profile that we know for a lot of what the companies have been navigating. We were talking about Samsung earlier. For Apple, they're seeing a move higher of about half a percent.

But I think perhaps it's more focused on how Foxconn is going to deliver for them on the second half of this year, part of the year where they typically have a lot of their larger announcements, especially on the hardware, handset, smartphone, wearables devices as well typically.

SEANA SMITH: Yeah. We closely track this just because of exactly like you're saying. What this means for Apple? What if this is offering any sort of insight into demand? I think one of the reasons why Apple is also rising with the broader market today is also because Apple shares, it's no secret, have been under a tremendous amount of pressure, have far been an underperformer when you compare it to some of those other Mag Seven names since the start of the year. When you're looking at year-to-date losses, it's in the red. You're still looking at a loss here over the last several days as well.

So taking into account that some of that bad news or some of that worry had already been priced in actually over the last five days still up just about 1%, but year-to-date still in the red. Analysts getting a bit more bearish on Apple, at least in the short-term. You talk about the fact that we do see falling demand or saturated demand here in the US, and then taking a look at what's happening over in China, obviously, sluggish demand there, rising competition. And then also the fact that the lackluster in terms of excitement surrounding their new products, What is exactly going to take to get iPhone users who currently have an iPhone to upgrade?

And there's lots of questions about whether or not this next cycle that we will likely get in the fall if that will be enough to kind of change some of that momentum. So many more analysts than we had seen over the last several months have been moving to the sideline on this name Apple. And I think we're seeing some of that lackluster demand reflected in Foxconn's results today.

BRAD SMITH: Yeah. And segment by segment here, specifically one of those segment, and we've been focused in on smartphones here declined year-over-year, it blamed actually the high base, so tough comps that they had seen last year when they were really being able to move through some of the orders that they saw come in and after one of the factories there did see some reopening. That was, of course, chronologically coming after the zero COVID policy, a zero tolerance for COVID policy and pandemic disruptions that the industry had seen as well.