Flex (FLEX) Q4 Earnings Miss, Revenues Surpass Estimates
Zacks Investment Research | Apr 30, 2018 12:14AM ET
Flex Ltd. (NASDAQ:FLEX) reported fourth-quarter fiscal 2018 non-GAAP earnings of 28 cents per share, which missed the Zacks Consensus Estimate by a couple of cents. Moreover, the figure declined 3.4% from the year-ago quarter.
Revenues increased 9.3% from the year-ago quarter to $6.41 billion, coming at the higher end of guided range and also beat the Zacks Consensus Estimate of $6.23 billion.
The year-over-year revenue growth can be attributed to robust performance across most segments. The top-line benefited from new business wins driven by the Sketch-to-Scale initiative as well as continued development of the long-term strategic partnership with Nike (NYSE:NKE) . However, increasing expenses focused on supporting company’s products, keep the bottom line under pressure.
Quarter Details
Communications & Enterprise Compute (“CEC”) revenues declined 5.4% from the year-ago quarter to almost $1.88 billion. Legacy-end markets impacted results. However, expansion in its data center capabilities holds promise.
Consumer Technologies Group (“CTG”) revenues improved 7.2% from the year-ago quarter to $1.65 billion.
Revenues from the IEI segment were $1.64 billion, which surged 26.3% on a year-over-year basis. The segment benefited from a robust demand across its diversified markets as well as the beginning of several Sketch-to-Scale programs.
HRS revenues were up a robust 19.4% from the year-ago quarter to $1.25 billion.
Operating Details
Adjusted gross margin contracted 40 basis points (“bps”) on a year-over-year basis to 6.7% in the quarter.
Adjusted selling, general & administrative (“SG&A”) expenses were $229 million, exceeding the year-over-year figure by almost $15 million. However, as a percentage of net sales, SG&A expenses declined 10 bps to 3.6% primarily due to increasing design and engineering cost. Moreover, higher level of investment and under-absorbed overhead costs increased expenses.
Non-GAAP operating margin declined roughly 40 bps on a year-over-year basis to 3.1%.
Flex Ltd. Price, Consensus and EPS Surprise
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