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Flextronics Swings to Profit

But revenue falls short of expectations.
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Flextronics

(FLEX) - Get Flex Ltd. Report

reversed a quarterly loss and matched analysts' earnings projections for the quarter, but its revenue number fell short.

Flextronics' stock dipped 3.8%, or 47 cent,s to $12 in after-hours trading.

The electronics manufacturing services firm said it earned $184.9 million, or 31 cents a share for the second quarter, compared with a loss of $2.4 million loss a year ago.

Omitting items like stock-based compensation expenses, gains and losses on divestitures, restructuring and other charges, Flextronics earned $116.7 million, or 20 cents a share, compared with $101.3 million, or 17 cents a share, in the same period last year.

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Flextronics reported $4.7 billion in revenue, ballooning from $3.81 billion in the year ago quarter.

Analysts polled by Thomson First Call had expected earnings of 20 cents on sales of $4.8 billion for the quarter.

For the third quarter, Flextronics forecast revenue from continuing operations to grow 25% to 30% year-over-year to between $5.1 billion and $5.3 billion. EPS should grow 10% to 15% to 22 cents to 23 cents. The average analyst estimate pegs the company to hit the high end of the company's guidance, with revenue of $5.3 billion and earnings of 23 cents a share.

For the full year ending in March 2007, the company anticipates sales to climb 25% to around $19 billion and earnings to grow 15% to 80 cents a share. The consensus forecast is $18.94 billion in revenue and matches the EPS figure.

"There has been a reacceleration of significant growth in all elements of our business, including design, vertically-integrated manufacturing services, components and logistics," Mike McNamara, Flextronics CEO said in a statement. "Revenue from continuing operations was an all-time record high, increasing 23% on a year-over-year basis and 16% on a sequential basis.

"Operating margin improved in the core-EMS business by 10 basis points on a year-over-year basis and gross margin improved sequentially by 10 basis points," he added.