Flextronics International Ltd. Stock Earnings Reports

Gross Profit

Increased to $532 million with a gross margin of 8.6%, improving by 160 basis points year-over-year.

Operating Margin

Reached a record 5.4%, up 120 basis points from the previous year.

Adjusted EPS

$0.57, a 30% increase year-over-year. GAAP EPS was reported at $0.93, benefiting from a non-cash tax gain.

Fiscal Year 2024 Earnings

Total revenue totaled $26.4 billion, a 7% decline from the prior year, but gross profit was $2.1 billion, and EPS was $2.15, an 11% increase year-over-year.

Segment Performance

• Reliability Segment: Revenue of $2.9 billion, driven by strong demand in cloud and automotive sectors. Operating income improved to $171 million.
• Agility Segment: Revenue reached $3.2 billion, with a 6% increase in operating income driven by AI demands in cloud computing.

Business Strategy and Future Outlook

• Focus on Margins and Growth: Flex aims to continue capitalizing on trends in AI-driven cloud demands, automotive electrification, and integrated manufacturing.
• Projected Revenue Growth in Cloud and Automotive: Expected to account for 40% of total revenue by fiscal year 2029.
• Automotive: Expected growth rates of high single to low double digits compounded annually.
• Financial Guidance for FY2025: Revenue expected to be flat to down 3% year-over-year with adjusted EPS projected between $2.30 and $2.50.

Cash Flow and Shareholder Returns

• Free Cash Flow: Total of $821 million for fiscal year 2024, exceeding the target of $600 million.
• Share Repurchases: The company returned $1.3 billion to shareholders, the highest annual figure, with ongoing buybacks expected to continue.

Operational Efficiency

Flex noted improvements in inventory and cash flow management, targeting ongoing reductions and optimized operational efficiency.

Succession and Leadership Changes

Michael Capellas, Chairman of the Board, will not seek re-election; succeeded by Bill Watkins, ensuring continuity in leadership.

Closing Remarks

The leadership expressed confidence in Flex's resilience and ability to navigate macroeconomic challenges, underscoring a commitment to long-term growth, margin enhancement, and creating shareholder value through a differentiated service offering in both cloud and automotive markets.

Investor Takeaway

Investors should note Flex's solid performance metrics despite a challenging revenue environment, strong margin growth, ongoing commitment to shareholder returns, and a strategically focused growth outlook, particularly within the cloud and automotive segments.