Contract electronics manufacturer Flextronics International Ltd. (FLEX) reported a profit for the third quarter, compared to a loss last year, when results were weighed down by a hefty goodwill impairment charge. The company's quarterly earnings per share, excluding items, also came in above analysts' expectations as did its quarterly sales. At the same time, the company provided a fourth quarter adjusted earnings guidance range, the mid-point of which is above analysts' current consensus estimate.
The Singapore-based company reported GAAP net income for the third quarter of $93 million or $0.11 per share, compared to a GAAP net loss of $6.0 billion or $7.43 per share for the year-ago quarter.
The year-ago quarter results included a $5.9 billion goodwill impairment charge.
Excluding items, adjusted net income for the third quarter was $138 million or $0.17 per share, compared to $127 million or $0.16 per share in the prior year quarter.
On average, 16 analysts polled by Thomson Reuters expected the company to earn $0.15 per share for the third quarter. Analysts' estimates typically exclude special items.
GAAP gross margin for the second quarter improved to 5.6% from 3.6% a year ago, while non-GAAP gross margin fell to 2.6% from 4.9% last year.
GAAP operating income for the quarter increased to $167 million from $21 million a year ago, while adjusted operating income for the quarter grew to $189 million from $186 million last year.
Net sales for the third quarter fell 19.5% to $6.56 billion from $8.15 billion in the same quarter last year. Third quarter net sales rose 12% sequentially. Thirteen analysts had a consensus revenue estimate of $6.29 billion for the third quarter.
Paul Read, CFO of Flextronics, said, "The third quarter represented a solid financial performance for the Company. We continued to drive margin expansion and with our industry leading cash conversion cycle of 11 days, we generated substantial cash flow."
Looking forward to the fourth quarter, the company expects revenue of $5.8 billion to $6.2 billion and adjusted earnings in the range of $0.13 to $0.16 per share, which exclude $0.07 per share for estimated restructuring activities, quarterly intangible amortization, stock-based compensation expense and non-cash interest expense.
Analysts currently expect the company to earn $0.13 per share on revenue of $5.85 billion for the fourth quarter.
Among others in the industry, Jabil Circuit, Inc. (JBL) last month reported a profit for the first quarter as compared to a loss in the first quarter of the prior year, when results were hurt by hefty goodwill impairment charges. The company's core earnings per share also came in above analysts' expectations. At the same time, the company forecast second quarter core earnings per share analysts' current consensus estimate.
Flextronics shares closed Wednesday's regular trading session on the Nasdaq at $7.10, up 53 cents or 8.07%. The stock is currently losing 40 cents or 5.63% in after hours trading.
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