Flex announced a 9% year-over-year decline in sales for its second fiscal quarter that ended Sept. 27.
Net sales hit $6.1 billion for the quarter for the global electronics design, manufacturing and logistics company.
With 200,000 employees in global locations, Flex serves many tech manufacturers such as Cisco and others across a wide range of industry verticals. It is sometimes called a “company behind companies.” It refers to itself as a Sketch-to-Scale provider that designs and also builds products for its customers to bring to market.
The company announced its revenues and earnings on Thursday, noting the revenue loss and adjusted operating income of $227 million with a net loss of $117 million.
In a statement, CEO Revathi Advaithi said the quarter “was a step in the right direction…We will build on this momentum to drive profitable growth and shareholder value going forward.”
Advaithi assumed the CEO role in February after Michael McNamara resigned as CEO in December 2018 after 24 years at the company.
For its third fiscal quarter, Flex expects revenue in the range of $6 billion to $6.3 billion.
The positive outlook and higher earnings than expected helped drive Flex stock 8% higher to $11.24 mid-day on Friday.
In a call with analysts, Advaithi highlight Flex growth in displays for industrial and energy verticals and reduced exposure with some products sold in India and China. Flex was also the design lead on a storage media product for data centers and there was also a major win for an integrated connectivity module for a major North American automaker.
He said that customers have described Flex as outpacing the industry in technology innovation for energy and power, as well as 4G and 5G.
Flex’s Industrial and Emerging Industries group saw revenues for the quarter of $1.8 billion, a 40% increase year-over-year. The Consumer Technology Group saw a 21% decline to $1.4 billion, while the Communications and Enterprise Compute group saw a 19% decline to $1.7 billion, partly due to a settlement reached with Huawei.
The communications sector underperformance was broad and involved some of Flex’s largest customers. Chief Financial Officer Christopher Collier said customers’ reduced forecasts are consistent with market indicators and signal a “near term slowing of telecom capex.”