Electronics Production | January 28, 2010

Flextronics with solid figures for 3Q

The Singapore-based EMS-provider Flextronics reported third quarter net sales of $6.6 billion, a 12% sequential increase.
Net sales for the third quarter ended December 31, 2009 were $6.6 billion, an increase of 12%, compared to net sales for the second quarter ended October 2, 2009. Adjusted operating income increased 27% to $189 million or 2.9% of net sales, compared to $149 million or 2.6% of net sales in the prior quarter. Adjusted net income for the third quarter was $138 million and adjusted EPS was $0.17 compared to $104 million and $0.13, respectively, for the prior quarter.

“Our revenue increase of 12% for the quarter represents a broad and strong performance, with all of our market segments increasing sequentially. Operating results improved with adjusted operating income at 2.9%, increasing 30 bps over the prior quarter and ROIC continued to strengthen to 30.1% in the quarter,” said Mike McNamara, CEO of Flextronics.

Cash and cash equivalents increased to a record $2.2 billion at December 31, 2009, an increase of $275 million from the prior quarter. During the third quarter, Flextronics generated $331 million of operating cash flow and $291 million of free cash flow (defined as net cash provided by operating activities of $331 million, less purchases of property and equipment, net of dispositions).

Net debt, which is total debt less total cash, was further reduced in the current quarter by $278 million to $309 million. Net debt has decreased by approximately $1 billion from one year ago. Adjusted ROIC improved to 30.1% for the quarter, an increase of 790 bps compared to 22.2% for the prior quarter.

Paul Read, CFO of Flextronics added, "The third quarter represented a solid financial performance for the Company. We continued to drive margin expansion and with our industry leading cash conversion cycle of 11 days, we generated substantial cash flow. Cash flow from operations during the quarter was $331 million and for the fiscal year-to-date we have generated ~$750 million. Our net debt has benefitted from the cash generation and ended the quarter at $309 million, down meaningfully from the $587 million in the prior quarter."


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