Flextronics Profit Drops, Yet Tops Estimates

(RTTNews) - Contract electronics manufacturer Flextronics International Ltd. (FLEX), Thursday reported a decline in first-quarter profit, due mainly on lower revenues and increased expenses, even as earnings topped Wall Street estimates.

Flextronics, with expertise in computing, electronic games, mobile communication and digital devices, provided a strong revenue outlook, riding mainly on the launch of Google Inc.'s new smartphone.

While weak economic conditions and poor order intake has been hurting Flextronics' results, the company has cut jobs and CEO Mike McNamara opines there is stability on the macroeconomic front.

Singapore-based Flextronics reported its first-quarter net sales declined 3 percent to $5.79 billion from $5.98 billion last year. Analysts polled by Thomson Reuters estimated revenues of $5.45 billion for the quarter.

Net income for the first quarter was $59 million or $0.09 per share, compared with $128.5 million or $0.19 per share last year.

Results for the recent quarter included restructuring charges of $41 million.

Excluding items, adjusted earnings from continuing operations were $112 million or $0.18 per share, compared with $154 million or $0.22 per share last year. Analysts expected earnings of $0.14 per share for the quarter. Analysts' estimates typically exclude special items.

For the second quarter, Flextronics expect adjusted earnings in the range of $0.19 to $0.22 per share and revenues of $6.1 billion to $6.4 billion. GAAP earnings is expected to be lower by about $0.03 per share for amortization and stock-based compensation expense. Analysts estimate earnings of $0.21 per share on revenues of $6.08 billion for the quarter.

In April, Flextronics completed its acquisition of manufacturing operations in Tianjin, China and assumed the management of the Jaguariuna, Brazil facility from Motorola Mobility LLC, owned by Google Inc. (GOOG). The deal also includes a manufacturing and services agreement for Motorola products. Google's Motorola unit is set to unveil its Moto X phone in August.

Flextronics stock closed Thursday at $8.14, up $0.01 or 0.12%, on a volume of 6.1 million shares on the Nasdaq. In after hours, the stock gained $0.01 or 0.12%. The stock has traded in a 52-week range of $5.47 - $8.20.