FLEX -3.43 to 7.48 after beating estimates but lowering guidance - I think this selloff is overdone a picked up a very small starter position this morning .... the stock was near $20 in January and doesn't deserve to be down 62% from the high now trading at just 7x Mar FY19 guidance .... historically the stock has traded at a forward PE averaging around 12x, so now looks cheap at a 40% discount to the norm.
Flextronics is a contract manufacturer, based in Singapore and with operations around the world.
briefing -
Flex beats by $0.01, misses on revs; guides Q3 EPS below consensus, revs below consensus; guides FY19 EPS below consensus, revs below consensus; ANnounces wind down of NKE operations in Mexico, CEO McNamara retires (10.91 +0.01) :
Reports Q2 (Sep) earnings of $0.29 per share, $0.01 better than the S&P Capital IQ Consensus of $0.28; revenues rose 7.0% year/year to $6.71 bln vs the $6.78 bln S&P Capital IQ Consensus.
Co issues downside guidance for Q3, sees EPS of $0.29-0.33, excluding non-recurring items, vs. $0.36 S&P Capital IQ Consensus; sees Q3 revs of $6.6-7.0 bln vs. $7.24 bln S&P Capital IQ Consensus.
Co issues downside guidance for FY19, sees EPS of $1.05-1.15, excluding non-recurring items, vs. $1.23 S&P Capital IQ Consensus; sees FY19 revs of $26.0-27.0 bln vs. $27.56 bln S&P Capital IQ Consensus.
NIKE Update
The Company has worked hard with NIKE to make the footwear manufacturing operations in Mexico technically and commercially successful. In recent weeks, however, it became clear that the Company would be unable to reach a commercially viable solution. Accordingly, Flex and NIKE have mutually agreed to wind-down the footwear manufacturing operations in Guadalajara by December 31, 2018. The Company is in the process of finalizing the terms and details of the wind-down and is striving hard to retain many of the affected employees and repurpose the facility. In connection with the wind-down of the operation, the Company recognized $30 million of exit costs primarily related to an estimated impairment of fixed assets. The Company may incur additional costs to complete the wind-down.
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