Flextronics' Q3 Profits Down on Restructuring Charges PDF Print E-mail
Written by Mike Buetow   
Thursday, 24 January 2013 16:58

SAN JOSE — Flextronics today reported third-quarter net income plunged 70% to $32 million as the company took $103 million in restructuring and other one-time charges.

For the period ended Dec. 31, net sales down 18% from last year to $6.1 billion. Revenue results were within previously company guidance of $5.8 billion to $6.2 billion.

Adjusted net income increased 13% over the year-ago quarter to $148 million. During the quarter, the EMS company took $103 million in pretax restructuring charges, including $21 million in cash predominantly related to employee severance and benefits, and $82 million of non-cash asset impairment charges. The company expects to take an additional $100 million to $125 million in pretax restructuring charges in its fiscal fourth quarter, comprised primarily of employee severance and benefit costs of approximately $90 million to $110 million and the remaining charges associated with other exit related costs.

“It is clear that the macroeconomic environment is challenging with limited visibility and many economic risks remain," said Mike McNamara, CEO, in a statement. We are aggressively optimizing our operating footprint and improving our cost structure to better position us for our multi-billion dollar pipeline of recent bookings, and the eventual improvement in the business environment.”

Free cash flow for the period was $395 million, bringing the year-to-date total to $678 million.

Flextronics guided for March quarter revenue of $5 billion to $5.3 billion.

Flextronics is the world's second-largest contract assembler, after Foxconn, and the 16th-largest printed circuit board fabricator through its Multek arm.

 

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