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Why Flextronics (FLEX) Stock Is Up After-Hours Today

NEW YORK (TheStreet) -- Flextronics (FLEX) was gaining 3.1% to $9.27 in after-hours trading Wednesday after beating analysts' estimates for earnings and revenue in the fiscal fourth quarter.

In its fiscal fourth quarter Flextronics reported an EPS of 24 cents a share, beating the Capital IQ Consensus of 20 cents a share by 4 cents. Revenue grew 26.8% year-over-year to $6.72 billion in the quarter. Analysts expected revenue of $6.1 billion.

The increased revenue was due to higher demand for video game consoles and smartphones. Flextronics produces the Xbox One for Microsoft (MSFT) and smartphones for Google (GOOG).

"Fiscal 2014 marked a year of continuous improvement and execution," Flextronics CEO Mike McNamara said in a press release. "We consistently grew revenue, adjusted operating profit dollars, and adjusted EPS sequentially every quarter from our March through a year ago through our December quarter. And while we are very pleased to have exceeded expectations for all three metrics this quarter, we remain focused on providing industry-leading, end-to-end supply chain solutions, driving growth and executing our strategy."

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TheStreet Ratings team rates FLEXTRONICS INTERNATIONAL as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate FLEXTRONICS INTERNATIONAL (FLEX) a BUY. This is driven by a few notable strengths, 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, good cash flow from operations, solid stock price performance, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 1.8%. Since the same quarter one year prior, revenues rose by 17.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 187.50% and other important driving factors, this stock has surged by 37.90% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FLEX should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electronic Equipment, Instruments & Components industry. The net income increased by 206.6% when compared to the same quarter one year prior, rising from $47.35 million to $145.16 million.
  • Net operating cash flow has significantly increased by 59.87% to $764.55 million when compared to the same quarter last year. In addition, FLEXTRONICS INTERNATIONAL has also vastly surpassed the industry average cash flow growth rate of 0.94%.
  • FLEXTRONICS INTERNATIONAL reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in 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 ($0.86 versus $0.45).
  • You can view the full analysis from the report here: FLEX Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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