Flextronics International Ltd (
reached a new 52-week high of $7.39 on Thursday, May 16, 2013.
The bullish run reflects Flextronics new initiatives of divesting
non-core assets and deployment of new technologies. New programs
are expected to boost production volumes by early fiscal 2014.
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The closing price of Flextronics on May 16 was $7.22,
representing a strong one-year return of about 10.2% and a
year-to-date return of about 13.2%. The S&P 500 jumped 27.4%
and 12.9%, respectively during the same period. Average volume of
shares traded over the last three months stands at approximately
Flextronics delivered a positive earnings surprise of 15.1% over
the past four quarters. This Zacks Rank #3 (Hold) stock has a
market cap of $4.78 billion and a long-term expected earnings
growth rate of 12.0%.
Modest 4Q Results, Upbeat Guidance
Flextronics reported fourth quarter earnings of 12 cents per
share that matched the Zacks Consensus Estimate but declined from
22 cents reported in the year-ago quarter.
Revenues declined 17.0% from the year-ago quarter to $5.30
billion, slightly short of the Zacks Consensus Estimate of $5.45
billion. The year-over-year decline in revenues was due to the
winding down of the assembly business with
Research In Motion (
For the first quarter, Flextronics forecast adjusted earnings in
the range of 12 cents to 16 cents per share. Total revenue is
expected in the range of $5.3 billion to $5.6 billion.
Key Growth Catalysts
We believe that new program wins and acquisition of
Motorola manufacturing unit in Brazil and Tianjin China will
drive growth in Flextronics key revenue segments (Industrial and
Emerging Industries & High Velocity Solutions) in the near
However, profitability is expected to remain weak due to
continuing investments in the near term. Additionally,
macroeconomic concerns and weak end-market demand are major
concerns. Moreover, the portfolio realignment is expected to hurt
Flextronics' top-line growth in the near term.
The Zacks Consensus Estimate moved down a couple of cents to 12
cents over the past 30 days, reflecting the near-term concerns.
For fiscal 2014, the earnings estimate remained steady at 76
cents per share over the past 30 days.
Other Stocks to Consider
Another stock, which provides electronic manufacturing services
and is worth considering is
Sanmina Corp. (
with a Zacks Rank #2 (Buy).