Flextronics Beats Guidance, Announces Layoffs PDF Print E-mail
Written by Mike Buetow   
Wednesday, 29 January 2014 16:45

SAN JOSE -- Flextronics today announced fiscal third-quarter net income slipped 3.6% to $145.2 million. For the period ended Dec. 31, the EMS company had net sales of $7.2 billion, up 16.7% and exceeding previous company guidance of $6.5 billion to $6.9 billion.

Adjusted operating income increased $28 million or 18% sequentially to $187 million. GAAP operating income of $174 million increased $24 million from $150 million in the prior quarter.

During the quarter Flextronics generated over $760 million of cash from operations.

For its fourth quarter ending March 31, Flextronics expects revenue in the range of $5.9 billion to $6.3 billion. That's up from March 2013, when the company reported $5.3 billion in sales. Still, the company plans to reduce its workforce and initiate other cost-reduction activities, and will take $30 million to $35 million in pretax cash charges. When complete, Flextronics expects annualized savings of approximately $60 million.

The cuts will be to the company's sales and administrative workforce, and not tied to operations, the company said. "We’ve made some adjustments just over a year ago with our footprint. We think it’s the right footprint," said CEO Michael McNamara.

Also today, Motorola Mobility, a major customer of Flextronics, announced it would be acquired by Lenovo. On a call this afternoon with analysts, Flextronics chief financial officer Christopher Collier said the company does not expect any near-term negative impact from the deal. Motorola Mobility accounted for more than 10% of Flextronics' revenue in the December quarter, while Lenovo's PC unit is also a Top 10 customer of Flextronics, with quarterly sales of about $500 million.

Another top 10 customer, IBM, is estimated to make up 7 to 8% of Flextronics' sales.

 

 

Last Updated on Thursday, 30 January 2014 14:17
 

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