Summary
Flextronics International Ltd. (FLEX) reported its second-quarter fiscal year 2015 results, ending September 26, 2014. The company demonstrated revenue growth across most business segments, with notable increases in Industrial & Emerging Industries (IEI) and High Reliability Solutions (HRS), driven by demand in energy, appliances, automotive, and medical sectors. Overall net sales increased by 2% year-over-year for the quarter and 8% for the first six months of the fiscal year. Gross margins also saw improvement, attributed to increased revenues, a favorable product mix from higher-margin segments, and cost structure benefits from prior restructuring. Selling, general, and administrative expenses were effectively managed, decreasing both in dollar amount and as a percentage of net sales due to ongoing cost reduction measures. Financially, the company maintained a solid cash position with approximately $1.5 billion in cash and cash equivalents. Free cash flow showed a significant improvement, rising to $167.9 million for the first six months of fiscal 2015 compared to $42.8 million in the prior year period, reflecting strong operational performance and efficient working capital management. Share repurchases continued, with $203.4 million invested in the first six months of fiscal 2015, indicating a commitment to returning value to shareholders. The company also noted a favorable legal development regarding a lawsuit with Xilinx, Inc., where management expects any potential losses to be immaterial.
Financial Highlights
51 data points| Revenue | $6.53B |
| Cost of Revenue | $6.15B |
| Gross Profit | $377.08M |
| SG&A Expenses | $204.59M |
| Interest Expense | $19.00M |
| Net Income | $138.90M |
| EPS (Basic) | $0.24 |
| EPS (Diluted) | $0.23 |
| Shares Outstanding (Basic) | 585.76M |
| Shares Outstanding (Diluted) | 595.87M |
Key Highlights
- 1Net sales increased by 2% to $6.5 billion for the three months ended September 26, 2014, and by 8% to $13.2 billion for the six months ended September 26, 2014, compared to the prior year periods.
- 2Gross profit margin improved to 5.8% for the three-month period and 5.8% for the six-month period, up from 5.7% and 5.6% respectively in the prior year, driven by revenue growth, favorable product mix, and cost efficiencies.
- 3Selling, general, and administrative (SG&A) expenses decreased by $13.9 million to $204.6 million for the quarter and by $28.3 million to $413.9 million for the six months, improving efficiency as a percentage of net sales.
- 4Net income for the quarter was $138.9 million, or $0.23 per diluted share, an increase from $118.2 million, or $0.19 per diluted share, in the prior year.
- 5Free cash flow improved significantly to $167.9 million for the six months ended September 26, 2014, from $42.8 million in the prior year period.
- 6The company repurchased 19.8 million shares for $203.4 million in the first six months of fiscal 2015.
- 7Cash and cash equivalents stood at $1.5 billion as of September 26, 2014, providing ample liquidity.