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Flextronics Felled by March Quarter Slowdown

Published: 30 April 2009
 by Administrator
SAN JOSE -- Flextronics reported fourth-quarter net sales fell 28% to $5.6 billion and adjusted net income dropped 90% to $21.7 million.

Adjusted operating income for the quarter was $50.6 million and the margin was 0.9%, down from $262.5 million and 3.4%, respectively, a year ago.

For the fiscal year ended March 31, net sales were $30.9 billion, up 11% from a year ago. Adjusted operating income was $811.2 million with an adjusted operating margin of 2.6%, compared to $887.2 million and 3.2% a year ago. Adjusted net income fell 19% to $605 million.

The company reiterated earlier plans to take pretax restructuring charges of $220 million to $250 million, $130 million to $150 million in cash, as part of an ongoing downsizing scheduled to last six months.

At quarter's end, Flextronics had cash and cash equivalents of $1.8 billion. The company generated $286 million of operating cash flow and $197 million of free cash flow during the quarter.

For the first quarter ending July 3, the world's second-largest EMS company expects sales in the range of $5 billion to $6 billion.

On a conference call with analysts Wednesday night, company executives said they are seeing stabilization across all market segments, but it stopped short of calling the current conditions a recovery. The firm said the mobile and infrastructure end-markets have been softer than expected due to weakness at a large customer in each segment  (analysts said those customers are likely Sony-Ericsson and Nortel). Flextronics expects growth in the notebook, medical, smartphone and LCD TV segments in the coming quarters. 

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