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Flextronics Profit Tops Estimate; Outlook Weak


Contract electronics manufacturer Flextronics International Ltd. (FLEX) said Tuesday after the markets closed that its fourth quarter profit rose 16% from last year, as lower operating and income tax expenses helped offset a 6% decrease in revenue.

The company's quarterly earnings per share, excluding items, also came in above analysts' expectations. However, the company forecast first quarter revenue and earnings below analysts' current consensus estimates.

"We have continued our transition towards a more stable, predictable, and diversified portfolio with longer product lifecycles that generate increasing operating margins and strong free cash flow," said Mike McNamara, CEO of Flextronics.

Flextronics shares are currently losing 2.66% in after hours trading after closing the day's regular trading session at $6.77, down 9 cents or 1.42% on the Nasdaq.

Operating income for the quarter increased 3% to $179.6 on a reported basis, and grew 1% to $189.6 million on an adjusted basis.

Last month, Flextronics completed its acquisition of Stellar Microelectronics. The acquisition extends Flextronics' service offering in advanced custom packaging solutions that utilize the latest microelectronics technologies for the aerospace, defense and medical manufacturing markets and the ability to support customers with unique U.S. manufacturing needs such as AS9100C, ISO 9001:2008 and ISO13485:2003.

For its fourth quarter ended March 31, 2012, Singapore-based Flextronics reported net income for the fourth quarter of $156.7 million or $0.22 per share, compared to $135.3 million or $0.17 per share for the year-ago quarter.

Income from continuing operations for the fourth quarter was $173.4 million or $0.25 per share, compare to $134.7 million or $0.17 per share in the prior year quarter.

Excluding items, adjusted income from continuing operations for the fourth quarter was $197.2 million or $0.28 per share, compared to $161.8 million or $0.21 per share in the fourth quarter of last year.

On average, 11 analysts polled by Thomson Reuters expected the company to earn $0.23 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Net sales for the fourth quarter fell 6% to $6.38 billion from $6.79 billion in the same quarter last year. Ten analysts had consensus revenue estimate of $6.44 billion for the fourth quarter.

Looking forward to the first quarter, the company forecast revenue of $5.9 billion to $6.3 billion and adjusted earnings from continuing operations of $0.20 to $0.24 per share. Analysts currently expect the company to earn $0.25 per share on revenue of $6.72 billion for the first quarter.

Another contract electronics manufacturer Jabil Circuit Inc. (JBL) in March reported a 76% jump in second quarter profit, driven by strong revenue growth in its diversified manufacturing services and high velocity segments.

by RTTNews Staff Writer

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