SINGAPORE (dpa-AFX) - Singapore-based Flextronics International Ltd. (FLEX), Thursday said its profit for the second quarter declined 10 percent from a year ago, on higher costs despite an 8 percent increase in revenues. Earnings per share, however, were flat with last year primarily on a lower share count for the quarter. Flextronics' earnings for the quarter were in line with estimates, while revenues surpassed expectations.
Looking forward, the company provided its outlook for the third quarter, which is currently indicated to come in below Street estimates.
Flextronics' net income for the second quarter declined to $130 million from $144 million in the prior-year quarter. On a per share basis, earnings for the quarter was $0.18, flat with last year, due mainly to a lower share count in the recent quarter.
Adjusted net income for the quarter declined 12 percent to $158 million from $179 million in the year-ago quarter. Earnings on a per share basis was $0.22, a decline of 4 percent compared to $0.23 in the same quarter last year. On average, thirteen analysts polled by Thomson Reuters expected earnings of $0.22 per share for the quarter. Analysts' estimates typically exclude one-time items.
Flextronics' net sales for the quarter increased 8 percent to $8.0 billion from $7.4 billion reported in the previous year. Twelve analysts on consensus had a revenue estimate of $7.77 billion for the quarter.
The electronics manufacturing service provider's adjusted operating income was $176 million, a decline of 17% compared to $213 million last year.
Mike McNamara, CEO of Flextronics said, 'From a revenue growth perspective, our business performed well in the quarter despite the sluggish macroeconomic backdrop. Outside of our Industrial and Emerging Industries business group, our three remaining groups grew both sequentially and year-over-year driven by new outsourcing programs.'
Flextronics expects the exit of its ODM PC business to be completed in the December quarter, which it believes would improve operating profit performance.
Looking ahead to the third quarter, the company sees adjusted earnings in the range of $0.18 to $0.22 per share, which include costs of about $0.06 per share associated with the exit of the ODM PC business. GAAP earnings are expected to be $0.04 per share lower than the adjusted earnings guidance.
Flextronics expects third quarter revenue in the range of $7.3 billion to $7.7 billion, including a sequential reduction of about $550 million of ODM PC revenue linked to the 'accelerated exit of this business.'
Analysts currently expect earnings of $0.24 per share for the third quarter, on revenues of $8.01 billion.
FLEX closed Wednesday's trade at $6.11, up $0.01 or 0.16%, on a volume of 3.98 million shares on the Nasdaq. In after hours, the stock lost $0.29 or 0.48%, trading at $6.08.
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