Hon Hai Precision Industry (2317) Q2 2024 earnings summary

Executive summary

• Q2 FY24 revenue reached NTD 1,550,551 million, up 19% year-over-year and 17% sequentially.

• Consolidated revenue for the six months ended June 30, 2024 was NT$2,874.5 billion, up 3.9% year-over-year, with growth in Smart Consumer Electronics and Cloud/Networking Products.

• Net income attributable to owners was NTD 35,045 million for Q2, a 59% increase year-over-year; for the six months, net income was NT$57.1 billion, up 24.6% year-over-year.

• Gross profit margin improved to 6.42% in Q2; gross margin for the six months was 6.4%.

• Strong performance in AI server business, with over 60% QoQ revenue growth and >40% of total server revenue.

Financial highlights

• Operating income for Q2 FY24 was NTD 44,604 million, up 44% year-over-year and 21% sequentially; for the six months, operating profit was NT$81.4 billion, up 13.8% year-over-year.

• EPS for Q2 FY24 was NTD 2.53; basic EPS for the six months was NT$4.12.

• Cash and cash equivalents stood at NTD 1,048,680 million as of June 30, 2024.

• Free cash flow for the first half of 2024 was negative NTD 19,306 million.

• Total assets were NTD 3,966,849 million at June 30, 2024.

Outlook and guidance

• Q3 FY24 expected to see sequential growth in Smart Consumer Electronics and Computing Products.

• Management expects continued growth in Smart Consumer Electronics and Cloud/Networking Products, with ongoing investments in electric vehicles and AI-related manufacturing.

• Full-year 2024 outlook indicates stable or growing performance in key segments, especially AI servers and EVs.

• The company maintains a gearing ratio target of 70% or below.