Flextronics Tops Estimates, Outlook Weak; To Buy Mirror Controls For $494 Mln.

(RTTNews) - Flextronics International Ltd (FLEX) on Wednesday said its fourth-quarter profit surged from a year ago, when it incurred charges related to restructuring, even as sales waned. The company's earnings for the quarter topped Wall Street estimates, but sales fell short of expectations.

The contract electronics manufacturer provided some weak guidance for the current quarter.

Flextronics also said it agreed to buy Mirror Controls International for €457 million ($494 million) in cash from Dutch private equity firm Egeria. The company sees the deal to be accretive to earnings, which is expected to close in the September quarter.

Mirror, with three automated manufacturing facilities in China, Mexico, and Ireland, generated about €200 million ($216 million) in revenue over the past twelve months, historically growing over 20% year over year.

Following the announcement, Flextronics shares were down about 5 percent in after-hours trade on the Nasdaq.

Singapore-based Flextronics reported fourth-quarter net income of $135 million or $0.23 per share, compared with $43 million or $0.07 per share a year ago.

Excluding items, adjusted earnings for the quarter were $0.27 per share, compared with $0.24 per share last year. On average, 12 analysts polled by Thomson Reuters expected earnings of $0.25 per share for the quarter. Analysts' estimates typically exclude special items.

Flextronics' sales for the quarter dropped to $5.95 billion from $6.72 billion in the prior year. Eleven analysts had a consensus sales estimate of $6.27 billion for the quarter.

The company had expected sales of $6 billion to $6.4 billion.

Flextronics said its operating margin rose 30 basis points from a year ago to 3 percent. Cost of sales dropped to $5.6 billion from $6.3 billion last year.

For the first quarter, the company expects adjusted earnings of $0.20 to $0.26 per share on sales of $5.60 billion to $6.20 billion. Analysts currently expect earnings of $0.26 per share on sales of $6.50 billion.

FLEX closed Wednesday at $12.22, up $0.05 or 0.41%, on a volume of 3.7 million shares on the Nasdaq. In after hours, the stock dropped $0.70 or 5.73% at $11.52. In the past year, the stock has traded in the range of $8.46 - $12.86.