FLEX Q3 Earnings and Revenues Top Estimates, Increase Y/Y
Flex Ltd. FLEX reported third-quarter fiscal 2023 adjusted earnings of 62 cents per share, beating the Zacks Consensus Estimate by 3.33%. The bottom line also grew 24% year over year.
Revenues increased 17% year over year to $7.8 billion, surpassing the consensus mark by 3.7%. The company benefited from strength across the Agility Solutions and Reliability Solutions segments.
Flex Ltd. Price, Consensus and EPS Surprise
Flex Ltd. price-consensus-eps-surprise-chart | Flex Ltd. Quote
The Flex Agility Solutions Group comprises the Communications & Enterprise Compute or CEC and Lifestyle and Consumer Devices businesses. The group’s revenues were up 13% year over year to $4 billion. The increases in CEC and Lifestyle were partially offset by macroeconomic constraints.
The Flex Reliability Solutions Group comprises Health Solutions, Automotive and Industrial businesses. The group’s revenues went up 19% year over year to $3.2 billion. Demand remained healthy across the business segment, partly offset by the semiconductor shortage.
The Nextracker group’s revenue went up 53% year over year to $0.5 billion.
In the past year, shares of the company have increased 54.7% against the industry’s decline of 22%.
Image Source: Zacks Investment Research
The non-GAAP gross margin increased 20 bps on a year-over-year basis to 7.7% in the reported quarter.
The non-GAAP selling, general & administrative expenses, as a percentage of revenues, were 2.9% which decreased 10 bps from the prior-year period.
The non-GAAP operating margin expanded 30 bps year over year to 4.8%.
The Flex Agility Solutions Group’s adjusted operating margin was 4.5%, down 5 bps year over year. The Flex Reliability Solutions Group’s adjusted operating margin was 4.4%, down 55 bps. The Nextracker Group’s adjusted operating margin was 11.7%, up 620 bps.
Balance Sheet & Cash Flow
As of Dec 31, 2022, cash & cash equivalents stood at $2.57 billion compared with $2.45 billion as of Sep 30, 2022.
As of Dec 31, 2022, total debt (net of current portion) stood at $3.52 billion compared with $3.08 billion as of Sep 30, 2022.
In third-quarter fiscal 2023, the company generated cash flow from operating activities of $359 million and an adjusted free cash flow of $202 million.
In the quarter under review, the company repurchased shares worth $40 million.
For fourth-quarter fiscal 2023, Flex expects revenues between $7 billion and $7.4 billion.
The company expects adjusted earnings of 48-54 cents per share. The adjusted operating income is projected to be between $315 million and $345 million.
For fiscal 2023, Flex expects revenues between $29.9 billion and $30.3 billion.
It expects adjusted earnings of $2.27-$2.33 per share. The adjusted operating margin is projected to be 4.7%.
Zacks Rank & Stocks to Consider
Flex currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader technology space are Arista Networks ANET, Jabil JBL and Calix CALX. Jabil and Calix currently sport a Zacks Rank #1 (Strong Buy), whereas Arista Networks holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks.
The Zacks Consensus Estimate for Arista Networks 2022 earnings is pegged at $4.38 per share, rising 0.2 in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 12.7%. Shares of ANET have increased 3.3% in the past year.
The Zacks Consensus Estimate for Jabil’s 2023 earnings is pegged at $8.37 per share, rising 2.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 8.8%. Shares of JBL have increased 35.9% in the past year.
The Zacks Consensus Estimate for Calix’s 2022 earnings is pegged at $1.06 per share, unchanged in the past 60 days.
Calix’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 19%. Shares of CALX have soared 41.2% in the past year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Jabil, Inc. (JBL) : Free Stock Analysis Report
Flex Ltd. (FLEX) : Free Stock Analysis Report
Calix, Inc (CALX) : Free Stock Analysis Report
Arista Networks, Inc. (ANET) : Free Stock Analysis Report
To read this article on Zacks.com click here.