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Apple Stock Edges Higher Despite Cautious Smartphone Outlook From Supplier Foxconn

Foxconn, Apple's main iPhone assembler, forecast muted smartphone revenues for its September quarter amid waning global demand.

Updated at 9:46 am EST

Foxconn, the world's biggest electronics manufacturer and Apple Inc.'s  (AAPL)  most important supplier, posted better-than-expected second quarter earnings Wednesday but cautioned that waning smartphone demand would keep revenues in check heading into the autumn months. 

Foxconn, formally known as Hon Hai Precision Industry Co. Ltd., said net profits for its June quarter rose 11.8% to T$33.29 billion, or just over $1.1 billion, and came in ahead of analysts' forecasts of a T$31 billion tally. Group revenues rose 12% from last year to T$1.5 trillion, Foxconn said, while profit margins improved by 33 basis points to 2.94%. 

Foxconn said it sees current-quarter smartphone revenues to come in flat to last year, citing "geopolitics, inflationary pressure and the Covid pandemic", with support from solid demand in its cloud and networking products divisions. Apple typically accounts for around half of Taiwan-based Foxconn's annual revenue.

“Against a backdrop of slowing demand and supply chain disruptions, the strong operating performance demonstrates the high degree of the Group’s resilience,” said Chairman Young Liu. “It reflects a better product portfolio and customer structure.”

Late last month. Apple declined to provide detailed September quarter revenue guidance following its better-than-expected third quarter earnings, but said overall revenue growth would likely outpace gains over the three months ending in June.

Apple said solid China demand, as well as a muted supply chain hit, helped iPhone revenues rise 2.8% from last year to $40.67 billion over the June quarter, just ahead of the $40.5 billion Street forecast.

Overall, Apple earned more than $19.44 billion for its fiscal third quarter, as revenues rose 2% from last year to $82.96 billion, just ahead of analysts' estimates of $82.88 billion.

Apple shares were marked 1.8% higher in early trading Wednesday to change hands at $167.92 each.