01—Abstract
Summary
Summary of the 10-Q filed January 29, 2015. Cited figures are marked; the original filing is the authoritative source.
Flextronics International Ltd. (FLEX) reported net sales of $7.03 billiona for the third quarter ended December 31, 2014, a slight decrease of 2.2% compared to the prior year's quarter, primarily driven by softness in its Consumer Technology Group (CTG) and Integrated Network Solutions (INS) segments.
Despite the revenue dip, gross profit increased to $408.7 millionb, and gross margin improved to 5.8% from 5.5% year-over-year, attributed to a better cost structure and favorable product mix. The company also saw a reduction in selling, general, and administrative (SG&A) expenses as a percentage of net sales, falling to 3.1% from 3.4% in the prior year period. For the nine-month period ended December 31, 2014, net sales grew 4.2% to $20.2 billion, supported by growth in the Industrial & Emerging Industries (IEI) and High Reliability Solutions (HRS) segments, along with contributions from acquisitions.
Net income for the third quarter rose to $152.9 millionc ($0.26 per diluted share) from $145.2 million ($0.23 per diluted share) in the prior year, indicating improved profitability. The company maintained a strong liquidity position with $1.7 billion in cash and cash equivalents and generated $669.4 million in cash from operating activities for the nine-month period.
02—Key points
Key Highlights
- Net sales for the third quarter of fiscal year 2015 were $7.03 billion, a 2.2% decrease year-over-year.
- For the nine-month period ended December 31, 2014, net sales increased by 4.2% to $20.2 billion.
- Gross profit for the third quarter increased by $10.0 million to $408.7 million, with gross margin improving to 5.8% from 5.5% year-over-year.
- SG&A expenses decreased by $8.6 million to $216.0 million for the quarter, representing 3.1% of net sales, down from 3.4% in the prior year period.
- Net income for the third quarter increased to $152.9 million ($0.26 per diluted share) compared to $145.2 million ($0.23 per diluted share) in the prior year.
- The company ended the quarter with $1.71 billion in cash and cash equivalents.
- Cash from operating activities for the nine-month period was $669.4 million, reflecting strong operational cash generation.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2015filed January 29, 2015Financial Statements
Q3 FY2015 against Q3 FY2014
| Line item | Q3 FY2015Q3 FY2014 | Change |
|---|---|---|
| Revenue | $7.03B$7.18B | −2.2% |
| Cost of Revenue | $6.62B$6.78B | −2.5% |
| Gross Profit | $408.66M$398.62M | +2.5% |
| SG&A Expenses | $215.99M$224.58M | −3.8% |
| Interest Expense | $19.90M$19.90M | 0.0% |
| Net Income | $152.90M$145.16M | +5.3% |
| EPS (Basic) | $0.26$0.24 | +8.3% |
| EPS (Diluted) | $0.26$0.23 | +13.0% |
| Shares Outstanding (Basic) | 577.16M606.72M | −4.9% |
| Shares Outstanding (Diluted) | 587.20M618.68M | −5.1% |
05—Questions
Frequently Asked Questions
What was the revenue performance for Flextronics in the third quarter of fiscal year 2015?
Flextronics reported net sales of $7.03 billion for the third quarter ended December 31, 2014. This represents a slight decrease of 2.2% compared to the $7.18 billion in net sales for the same period in the previous year. The decrease was primarily attributed to softness in the Consumer Technology Group (CTG) and Integrated Network Solutions (INS) segments.
How did Flextronics' profitability change in the third quarter?
Profitability improved in the third quarter. Net income rose to $152.9 million from $145.2 million in the prior year's third quarter. Diluted earnings per share increased to $0.26 from $0.23. This improvement was driven by an increase in gross profit, a decrease in SG&A expenses as a percentage of net sales, and an overall favorable product mix.
What is the company's cash position and cash flow generation?
As of December 31, 2014, Flextronics had $1.71 billion in cash and cash equivalents. For the nine-month period ended December 31, 2014, the company generated $669.4 million in cash from operating activities. Investing activities used $234.0 million, while financing activities used $324.4 million during the same nine-month period.
Were there any significant business acquisitions or dispositions during the period?
During the nine-month period ended December 31, 2014, the company completed four acquisitions that expanded its capabilities in the medical devices market. These acquisitions were not individually or in aggregate significant to the company's financial results. The company also recognized an $11.0 million loss in connection with the disposition of a manufacturing facility in Western Europe.
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