The contract electronics maker posted earnings of 26 cents a share. Analysts surveyed by Thomson Reuters estimated earnings of 23 cents a share. Flextronics reported revenue of $7.18 billion for the quarter, beating analyst estimates of $6.7 billion.
The Singapore-based company said strong demand for video game consoles and smartphones helped revenue. Flextronics produces Xbox consoles for Microsoft (MSFT) and smartphones for Google's (GOOG) Motorola division (which Google just sold to Lenovo, which Flextronics already has a relationship with).
Flextronic said it expects fiscal fourth-quarter earnings of between 18 cents and 22 cents a share and revenue of between $5.9 billion and $6.3 billion. Analysts estimate earnings of 19 cents a share and $5.97 billion in revenue.Analyst firm Craig-Hallum upgraded Flextronics to "buy" from "hold," raising the price target to $11 from $10. TheStreet Ratings team rates FLEXTRONICS INTERNATIONAL as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about its recommendation: "We rate FLEXTRONICS INTERNATIONAL (FLEX) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- FLEX's revenue growth has slightly outpaced the industry average of 1.7%. Since the same quarter one year prior, revenues slightly increased by 3.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- FLEXTRONICS INTERNATIONAL's earnings per share declined by 20.8% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, FLEXTRONICS INTERNATIONAL reported lower earnings of $0.45 versus $0.71 in the prior year. This year, the market expects an improvement in earnings ($0.80 versus $0.45).
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- FLEX's debt-to-equity ratio of 0.97 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that FLEX's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.55 is low and demonstrates weak liquidity.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. When compared to other companies in the Electronic Equipment, Instruments & Components industry and the overall market, FLEXTRONICS INTERNATIONAL's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: FLEX Ratings Report
Check Out Our Best Services for Investors
Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
Check Out Our Best Services for Investors
Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
Every recommendation goes through 3 layers of intense scrutinyquantitative, fundamental and technical analysisto maximize profit potential and minimize risk.
Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.