Fiscal Report
July 26, 2012

Flextronics' profit drops

EMS-provider Flextronics said its first quarter profit slipped from last year as customers cut down orders amid tough economic conditions, leading to a 20 percent drop in sales.

Net sales for the first quarter ended June 29, 2012 amounted to $6.0 billion, adjusted operating income was $177 million and adjusted operating margins increased 30 basis points to 3.0% during the current quarter compared to the same quarter last year. Adjusted net income from continuing operations for the first quarter ended June 29, 2012 was $156 million and adjusted EPS from continuing operations increased 10% year-over-year to $0.23 and GAAP EPS from continuing operations was up 11% year-over-year.

“Despite the challenging economic environment, we achieved our targeted operating margin and our adjusted EPS improved 10% compared to the same quarter last year. We have accomplished a transformation of our business to our desired portfolio model, which will lead to further margin expansion over the course of fiscal year 2013,” said Mike McNamara, CEO of Flextronics.

“As a result of our business transformation, our portfolio will improve our earnings predictability, generate higher margins and increase free cash flow going forward,” said Paul Read, CFO of Flextronics. “We repurchased another 20.4 million shares during the quarter which has resulted in the reduction of our diluted weighted average shares outstanding by 9% or 72 million shares from a year ago, underscoring our confidence in our cash flow generation and future business performance,” Read added.

Guidance

For the second quarter ending September 28, 2012, revenue is expected to be in the range of $5.9 billion to $6.3 billion. Adjusted EPS is expected to be in the range of $0.21 to $0.25 per share.
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