EMS giant Flextronics reported late last week that net income and earnings both rose year over year in the March quarter, its fiscal Q4.

The Singapore-based electronics manufacturing subcon recorded net sales from continuing operations of $3.5 billion for the quarter. Excluding the net sales from its Network Services division of $207 million in the year ago period, net sales from continuing operations grew 6 percent on a year-over-year basis. Flextronics announced late last year that it was divesting its network services business; several months later it merged it with Telavie AS.

For the entire fiscal year the company's net sales from continuing operations amounted to $15.3 billion in the year ended March 31, 2006, as compared to $15.7 billion in the year ended March 31, 2005. Excluding the net sales from the divested Network Services division of $275 million and $766 million in the years ended March 31, 2006 and 2005, respectively, net sales from continuing operations amounted to $15 billion in the years ended March 31, 2006 and 2005.

GAAP net income for the quarter amounted to $43 million, or 7 cents per diluted share, compared to $74 million, or 12 cents per diluted share, in the year ago quarter. Excluding intangible amortization, restructuring and other charges, net income for the March 2006 quarter increased 3 percent to $98 million, or 16 cents per diluted share, compared with $95 million, or 16 cents per diluted share, in the year ago quarter.

After-tax amortization, restructuring and other charges amounted to $55 million in the March 2006, compared to $21 million in the year ago quarter.

Excluding those charges net income for the year ended March 31, 2006 increased 7 percent to $417 million, or 69 cents per diluted share, compared with $388 million, or 66 cents per diluted share, for the year ended March 31, 2005. After-tax amortization, restructuring and other charges amounted to $276 million in this most recent fiscal year, compared to $49 million in the year ended March 31, 2005.

As a result, GAAP net income amounted to $141 million, or 24 cents per diluted share, in the year ended March 31, 2006, as compared to $340 million, or 58 cents per diluted share, in the year ended March 31, 2005.

"We are extremely pleased with our working capital management for the quarter, as we were able to reduce our cash conversion cycle to 10 days compared with 15 days in the year ago quarter," Mike McNamara, Flextronics CEO, said in a statement. "Overall, we feel fiscal 2006 was very successful for the company as we executed on our plan to divest non-core assets and focus our efforts and resources on the reacceleration of the significant growth opportunities in our core EMS business.

"As a result, during the year we divested our network services and semiconductor businesses and recently announced a definitive agreement to sell our software business. By monetizing these non-core assets at substantial gains over carrying values, Flextronics will have generated cash proceeds in excess of $1.1 billion, assuming the software transaction closes as expected this summer."

For the current June quarter, Flextronics said it expects total earnings per diluted share of 16 cents to 17 cents, which includes discontinued operations but excludes amortization of intangibles and stock-based compensation expense, and revenues from continuing operations of $3.7 billion to $3.9 billion. It anticipates earnings on a GAAP basis to be 13 to 14 cents per diluted share, reflecting quarterly intangible amortization and stock-based compensation expense.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved