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- ▼ April (8)
- ► 2007 (204)
Flextronics recent acquisition and merger with competitor Solectron was the cause of a loss reported in the close of the recent quarter. The merger which will help Flextronics continue to increase its substantial manufacturing marketshare did not come without its costs.
FLEX 10.36, +0.20, +2.0%) lost 11 cents a share on revenue of $7.78 billion. During the same period a year ago, the company earned $121 million, or 20 cents a share, on $4.68 billion in sales.
However, the results included more than $300 million in charges related to the Solectron acquisition, as well as stock-based compensation. Excluding those one-time items, Flextronics would have earned $215 million, or 22 cents a share.
Analysts surveyed by FactSet Research had forecast Flextronics to earn 22 cents a share on revenue of $7.78 billion.
Stockholders hoping to skate past rough times in the transition may have to tighten up the strings in their skate shoes as Flextronics learns how to operate as a larger entity and pull Solectron into its own culture. That and some cut backs in redundancies (layoffs), consolidations of partners (new contracts) and sale of some non-performing assets (get rid of obsolete equipment and redundantly located real estate).
That all points to a slow year for Flextronics as industries in general work to deal with a US recession, higher energy costs, more expensive natural resources and possibly inflation.