SAN JOSE – Flextronics reported net sales of $7.5 billion, down 4% year-over-year and 7% sequentially for its fiscal third quarter ended Dec. 31.

Revenue was down due to the EMS company's exit from the ODM PC business.

Net income was down 49% to $102.2 million. Adjusted operating income was $150 million, down 35% compared to the same period in 2010, including approximately $70 million in losses and other charges primarily related to the ODM PC business.

“This quarter we completed our exit of the ODM PC business, and all associated charges are included in our operating results," said CEO Mike McNamara. He said the decision would "substantially improve" the company's margins.

On a conference call with analysts, Flextronics said it wants to further reduce its exposure to the consumer market. The company is targeting a consumer mix of 30%, vs. its current 42%.

For the quarter, revenue at the company's Network Solutions unit was down 7% sequentially on inventory corrections at large telecom customers. Operating margins, excluding options, fell 20 basis points sequentially to 2.0%. Excluding a $70 million loss in its ODM PC business, operating margins were 3.0%, and are expected to climb to 3.0% to 3.1% in the coming quarter.

Components fell to a loss this quarter after being breakeven last quarter, and profitability here remains a struggle. Flextronics is undergoing restructuring, which includes the departure of certain high level managers in technology and sales. The company expects Components to break even in the June quarter.

For the fourth quarter ending Mar. 31, Flextronics guided for revenue of $6.3 billion to $6.6 billion.