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Flextronics Announces Third Quarter Results
January 30, 2008 | PRNewswireEstimated reading time: 3 minutes
Flextronics today announced results for its third quarter ended December 31, 2007 as follows:
(US$ in millions, except EPS) Three Month Periods Nine Month Periods Ended Ended December December December December 31, 2007 31, 2006 31, 2007 31, 2006 Net sales $9,069 $5,415 $19,783 $14,177 GAAP operating income $22 $153 $317 $300 Adjusted operating income (1) $300 $161 $625 $429 GAAP net income $(774) $119 $(547) $388 Adjusted net income (1) $250 $136 $530 $356 GAAP EPS $(0.94) $0.20 $(0.80) $0.66 Adjusted EPS (1) $0.30 $0.23 $0.77 $0.60
(1) A reconciliation of non-GAAP financial measures to GAAP financial measures is presented in Schedule II of this press release.
Third Quarter Results
Revenue increased $3.7 billion, or 67%, from the year ago quarter to a record high $9.1 billion in the December 2007 quarter. Adjusted operating profit increased $139 million, or 86%, from the year ago quarter to $300 million in the December 2007 quarter while adjusted operating margin improved 30 basis points from 3.0% to 3.3% over the same time period. Adjusted net income increased $114 million, or 84%, from the year ago quarter to $250 million in the December 2007 quarter while adjusted EPS increased 30% from $0.23 to $0.30 over the same time period.
Cash amounted to $1.8 billion at December 31, 2007. Operating cash flow generated $534 million and $1.05 billion in the three and nine month periods ended December 31, 2007, respectively. Free cash flow (operating cash flow less net capital expenditures) amounted to $470 million and $840 million in the three and nine month periods ended December 31, 2007, respectively.
"Overall demand in the December quarter was exceptionally strong as revenues and earnings exceeded the high end of our guidance," said Thomas Smach, chief financial officer of Flextronics. "Actual revenue in the quarter was $9.1 billion versus our guidance of $8.5 billion and adjusted EPS was $0.30 versus our guidance of $0.26."
"Our strong financial position provides us with substantial flexibility to make synergistic investments to enhance our competitiveness, expand our capabilities, drive revenue growth and enhance profitability," said Mike McNamara, chief executive officer of Flextronics. "We remain intensely focused on generating a higher return on capital while growing our business, as evidenced by the return on invested capital of 11.9%, which increased 70 basis points from the previous quarter."
McNamara concluded by stating, "I am very proud of the dedication and hard work of our employees and management across the globe in making this a record quarter for Flextronics while successfully integrating Solectron, the largest acquisition in our company's history."
Guidance
The Company reiterated its previously provided March 2008 quarter guidance of revenue in the range of $7.5 - $7.9 billion and adjusted EPS in the range of $0.22 - $0.24.
GAAP earnings per share are expected to be lower than the guidance provided herein by approximately $0.05 for quarterly intangible amortization and stock-based compensation expense and by approximately $0.19 - $0.27 per share for the previously announced remaining restructuring and other charges relating to the Solectron acquisition.
Conference Calls and Web Casts
A conference call hosted by Flextronics's management will be held today at 1:30 p.m. PST to discuss the Company's financial results for the third quarter ended December 31, 2007. This call will be broadcast via the Internet and may be accessed by logging on to the Company's website at http://www.flextronics.com. Additional information in the form of slide presentations may also be found on the Company's site. Replays of the broadcasts will remain available on the Company's website afterwards.
Minimum requirements to listen to the broadcast are Microsoft Windows Media Player software (free download at http://www.microsoft.com/windows/windowsmedia/download/default.asp) and at least a 28.8 Kbps bandwidth connection to the Internet.
About Flextronics
Headquartered in Singapore (Singapore Reg. No. 199002645H), Flextronics is a leading Electronics Manufacturing Services (EMS) provider focused on delivering complete design, engineering and manufacturing services to automotive, computing, consumer digital, industrial, infrastructure, medical and mobile OEMs. With the acquisition of Solectron, pro forma fiscal year 2007 revenues from continuing operations are more than US$30.0 billion. Flextronics helps customers design, build, ship, and service electronics products through a network of facilities in 35 countries on four continents. This global presence provides design and engineering solutions that are combined with core electronics manufacturing and logistics services, and vertically integrated with components technologies, to optimize customer operations by lowering costs and reducing time to market. For more information, please visit http://www.flextronics.com.