Archive photo: Computer servers, not identified as Flex equipment. panumas nikhomkhai/Pexels (cropped)
Flex raised its fiscal 2027 sales and adjusted earnings forecasts Wednesday after second-quarter revenue climbed 25% to $8.5 billion, while the manufacturer continued preparing a planned spinoff of its Cloud and Power Infrastructure business.
The company now expects full-year sales of $34.9 billion to $35.9 billion, up from its previous forecast of $33.7 billion to $35.2 billion, according to its earnings release.
Higher sales and margin forecasts
Flex increased its adjusted earnings-per-share outlook to $4.84 to $5.16 from $4.42 to $4.74. It raised its adjusted operating-margin forecast to 7.6% to 7.8% from 7.0% to 7.2%.
Those adjusted figures are non-GAAP measures. Flex said it could not reconcile its forward-looking adjusted measures to comparable GAAP measures without unreasonable effort.
The full-year guidance does not give effect to the planned Cloud and Power Infrastructure spinoff. It also includes contributions from recent acquisitions that closed after the second quarter ended September 25.
Quarterly profit rises
For its fiscal second quarter ended September 25, Flex reported sales of $8.491 billion, compared with $6.804 billion a year earlier. GAAP net income rose to $263 million from $199 million, and diluted earnings per share increased to 70 cents from 52 cents.
GAAP operating income was $414 million, with an operating margin of 4.9%. Adjusted operating income was $607 million, with an adjusted margin of 7.1%. Adjusted net income was $443 million, or $1.18 per share.
Cash provided by operating activities was $501 million. Free cash flow, a non-GAAP measure, was $261 million.
Spinoff remains planned
Chief Executive Revathi Advaithi said Flex was advancing the proposed separation while expanding its power portfolio through its acquisition of EPC Power.
Flex said the Axiom name and anticipated leadership were further steps toward creating two focused companies. The separation has not been completed and remains subject to approvals and completion requirements.
For the fiscal third quarter, Flex forecast sales of $8.87 billion to $9.17 billion and adjusted earnings per share of $1.19 to $1.25.
JBizNews Desk | Austin
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