Summary
Flex Ltd. (FLEX) reported its fiscal second-quarter results for the period ending September 29, 2023. The company saw a slight decrease in net sales, down 4% year-over-year to $7.47 billion for the quarter and down 2% to $14.81 billion for the six-month period. This was primarily attributed to a decline in the Flex Agility Solutions (FAS) segment, particularly in Consumer Devices and Lifestyle businesses, as well as softer market demand in Communications, Enterprise, and Cloud (CEC). Despite the revenue dip, gross profit saw an improvement, increasing to 8.9% of net sales for the quarter and 8.5% for the six months, up from 7.6% and 7.5% respectively in the prior year. This improvement was driven by a more favorable business mix, with higher-margin Flex Reliability Solutions (FRS) and Nextracker segments showing growth. The Nextracker segment, in particular, demonstrated strong performance with a 21% increase in net sales and a significant improvement in segment margin to 19.5% for the quarter. The company announced plans for a spin-off of its remaining interests in Nextracker, expected in the fourth quarter of fiscal year 2024. Additionally, Flex is planning targeted restructuring activities, estimating charges of approximately $100 million in the third quarter of fiscal year 2024 to improve operational efficiencies.
Financial Highlights
52 data points| Revenue | $6.93B |
| Cost of Revenue | $6.41B |
| Gross Profit | $519.00M |
| SG&A Expenses | $221.00M |
| Operating Income | $281.00M |
| Interest Expense | $38.00M |
| Net Income | $228.00M |
| EPS (Basic) | $0.51 |
| EPS (Diluted) | $0.51 |
| Shares Outstanding (Basic) | 443.00M |
| Shares Outstanding (Diluted) | 448.00M |
Key Highlights
- 1Net sales decreased by 4% to $7.47 billion for the three months ended September 29, 2023, and by 2% to $14.81 billion for the six months ended September 29, 2023.
- 2Gross profit margin improved to 8.9% for the three months and 8.5% for the six months, up from 7.6% and 7.5% respectively in the prior year periods.
- 3The Nextracker segment showed robust growth, with net sales up 21% year-over-year for both the three- and six-month periods, and segment margin expanding significantly.
- 4The Flex Agility Solutions (FAS) segment experienced a 10% decline in net sales for both periods, primarily due to weakness in Consumer Devices and Lifestyle businesses.
- 5The company announced plans to spin off its remaining interests in Nextracker, expected in the fourth quarter of fiscal year 2024.
- 6Flex committed to targeted restructuring activities expected to result in approximately $100 million in charges in the upcoming third quarter of fiscal year 2024.
- 7The company's cash and cash equivalents stood at $2.9 billion as of September 29, 2023, with total debt of $3.4 billion.