SAN JOSE -- Flextronics International, the world's largest EMS company, said yesterday that profits climbed despite a drop in sales of 4%.

For the three months ended March 31, the firm reported revenue of $3.61 billion, down 4% from $3.77 billion last year. The company cited lower demand for handsets, saying handset sales fell $480 million in the fourth quarter from the prior period.

The quarterly profit rose to $74.2 million, from $16 million a year ago.

The analyst consensus was sales of $4 billion.

For the fiscal year, Flextronics recorded a profit of $339.9 million on sales of $15.91 billion.

Flextronics guided for sales of $3.7 billion to $3.9 billion for the July quarter.

For fiscal 2006, the company expects sales of $17 billion to $17.5 billion, which would be a record for EMS/ODM firms. Analysts forecast sales of $19 billion.