December 9, 2023

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Foxconn, a major supplier to Apple, warned on Tuesday that it is “cautious positive” on its fourth-quarter outlook after record sales in September.

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The Taiwanese company’s comments may fuel debate over demand for iPhones in the coming months, given its outsized role in assembling Apple’s flagship device.

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Foxconn said September revenue totaled 822.3 billion new Taiwan dollars ($25.9 billion), up 40.4% year-on-year and up 83.2% compared to August, a record monthly sales for the company.

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This massive revenue growth was driven by “new product launches and smooth mass production” as well as the strong performance of its smart consumer electronics products division, which includes its flagship smartphone business. Foxconn does not name its customers, including Apple, in its earnings release.

Neil Shah, partner at Counterpoint Research, said Foxconn’s record revenue was driven by “storm demand” for the high price of the iPhone 14 Pro and Pro Max models launched last month.

While Foxconn maintained its full-year outlook, the company said on Tuesday it is “cautiously positive” on its fourth-quarter outlook.

“Inflation, the pandemic and supply chain dynamics still need to be closely monitored,” Foxconn said.

Inflation remains high and central banks are raising interest rates, raising fears of a global recession that could hurt consumer demand.

Foxconn’s comments come amid debate over the strength of Apple’s business against this difficult economic backdrop.

See also  Apple stock ticks down on report of cut to iPhone 14 Plus production

Last week, Bank of America analysts gave Apple stock a rare downgrade and cut its price target for the iPhone 14 on “weak consumer demand.” Apple shares soon fell sharply.

Apple shares fell about 12% in September and are down about 20% so far this year.

Bloomberg also reported last week that Apple had asked its suppliers to scrap plans to increase production of the iPhone 14.

However, not all analysts agree with Bank of America. Rosenblatt Securities on Thursday upgraded Apple shares from neutral to buy, citing the firm’s own research survey that suggested demand for the iPhone 14 remains strong.