SAN JOSE -- Flextronics, the world's largest contract electronics manufacturer, last night reported first-quarter net sales of $3.9 billion, up $17 million over last year.

For the quarter ended June 30, Flextronics' pro-forma net income rose 27% to $99.6 million. GAAP net income slid $15.6 million to $58.7 million year-over-year.

Flextronics took $41 million in after-tax amortization, restructuring and other charges.

The company guided for September quarter revenues of $3.8 billion to $4.2 billion. 

Chief financial officer Thomas Smach told Reuters yesterday that demand is "okay" across the company's various sectors.

Return on invested tangible capital rose to 25%, from 18% in the prior year quarter. Return on invested capital increased one percentage point to 9%. The cash conversion cycle was 20 days. Operating margin increased year-over-year for the seventh consecutive quarter to 3.4%, excluding restructuring charges.

The company ended the quarter with $830 million in cash, up $165 million from June 2004, while total debt has decreased by $217 million over the same period. This represents a net debt reduction of $382 million during the last 12 months.

In a statement, Michael Marks, chief executive, hinted at future acquisitions: "We expect to use our available cash to fund growth opportunities in the core EMS business, or redeploy it back into our capital structure."