Summary
Flextronics International Ltd. (FLEX) reported strong revenue growth in the third quarter ended December 31, 2013, with net sales increasing by 17.3% year-over-year to $7.2 billion. This growth was primarily driven by acquisitions, particularly the integration of certain manufacturing operations from Google's Motorola Mobility LLC, which significantly boosted the High Velocity Solutions (HVS) segment. The company's gross profit also saw a substantial improvement, rising to 5.5% of net sales from 4.0% in the prior year's comparable quarter, benefiting from increased volumes and favorable pricing, as well as the positive impact of prior restructuring efforts. Despite an increase in selling, general, and administrative expenses driven by acquisition-related investments and corporate infrastructure expansion, Flextronics demonstrated solid operational execution. The company maintained healthy operating cash flows, generating $1.1 billion for the nine months ended December 31, 2013, and ended the quarter with a strong cash position of $1.6 billion. The balance sheet reflects growth in assets, including inventories and accounts receivable, supported by customer advances and robust sales, while debt levels were managed through refinancing and opportunistic share repurchases. Overall, the report indicates a company experiencing significant top-line expansion driven by strategic acquisitions and operational improvements.
Financial Highlights
52 data points| Revenue | $7.18B |
| Cost of Revenue | $6.78B |
| Gross Profit | $398.62M |
| SG&A Expenses | $224.58M |
| Operating Income | $145.16M |
| Interest Expense | $19.90M |
| Net Income | $145.16M |
| EPS (Basic) | $0.24 |
| EPS (Diluted) | $0.23 |
| Shares Outstanding (Basic) | 606.72M |
| Shares Outstanding (Diluted) | 618.68M |
Key Highlights
- 1Net sales increased by 17.3% to $7.2 billion in the third quarter ended December 31, 2013, driven by acquisitions and strong performance in the High Velocity Solutions segment.
- 2Gross profit margin improved to 5.5% from 4.0% in the prior year's quarter, benefiting from increased volumes and prior restructuring efforts.
- 3The company generated $1.1 billion in cash from operating activities for the nine months ended December 31, 2013.
- 4Cash and cash equivalents stood at $1.6 billion as of December 31, 2013.
- 5Significant acquisitions, including those from Google's Motorola Mobility, contributed to the revenue growth.
- 6Selling, general, and administrative expenses increased due to investments related to acquisitions and business growth.
- 7The company maintained compliance with debt covenants and managed its debt structure, including a new $600 million term loan.