Weak outlook sinks Flextronics shares
Flextronics 3Q beats expectations but outlook disappoints, shares fall
NEW YORK (AP) -- Electronics designer and manufacturer Flextronics on Thursday said its fiscal third quarter net income declined on restructuring charges, but adjusted earnings beat expectations.
However, the company gave a weak forecast, and its stock price fell in after-hours trading.
The restructuring charges stem from a cost-cutting program aimed at cutting $140 million to $160 million annually and mainly consist of severance pay and benefit costs. The company expects an additional $100 million to $125 million in charges in the fourth quarter.
Net income for the three months ended Dec. 31 was $25 million, or 4 cents per share. That compares with net income of $102.2 million, or 14 cents per share, a year ago. Excluding restructuring charges, earnings totaled 22 cents per share.
Revenue fell 18 percent to $6.1 million from $7.5 million last year.
Analysts expected net income of 21 cents per share on revenue of $6 billion, according to FactSet.
For the quarter ending March 31, Flextronics expects adjusted earnings of 11 cents to 15 cents per share on revenue of $5 billion to $5.3 million.
That is short of analyst expectations for earnings of 20 cents per share on revenue of $5.69 billion.
"It is clear that the macroeconomic environment is challenging with limited visibility and many economic risks remain," said CEO Mike McNamara.
Shares fell 42 cents, or 6.3 percent, to $6.30 during after-hours trading, after closing the day up 8 cents at $6.72.
