Ticonderoga maintains a 'Sell' on Flextronics (FLEX); Q4 Earnings Preview

Ticonderoga maintains a 'Sell' on Flextronics (NASDAQ: FLEX), PT $5.60.

Ticonderoga analyst says, "We Expect FLEX to Meet our 4QFY11 Estimates. We expect Flextronics' 4QFY11 results to meet our revenue projection of $7.33 billion and our pro forma EPS estimate of $0.22 (Street is also at $0.22). Recall, the company's 4QFY11 outlook calls for sales of $7.1 billion to $7.4 billion with pro forma EPS of $0.21 to $0.23. As has been typical in recent quarters, we would not be surprised if the company benefits from non-operating items in the quarter to boost EPS. Our sales projection calls for a 6% sequential decline and better than the historical seasonal average of down 8% over the past thirteen years. We are projecting a 5.5% gross margin and a 2.9% operating margin, which likely has limited upside given the rising cost environment and the impact this could have on the company's components business. Keep in mind, the company is targeting the components business to at least reach breakeven in March quarter."

For more ratings news on Flextronics click here and for the rating history of Flextronics click here.

Shares of Flextronics closed at $7.30 yesterday.

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