Flextronics International (FLEX) Message Board

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Technology Stocks : Flextronics International (FLEX)

FLEX 62.84

-3.3%

Dec 17 3:59 PM EST

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To: Howard Bennett who wrote (1317)	1/2/2001 8:38:00 PM
From: Dave Gore	Read Replies (1) of 1422

Morningstar.com discusses $30 Billion Deal with Motorola From Morningstar.com review in December, 2000: "Flextronics' blockbuster outsourcing deal with Motorola MOT kicks in next year (meaning 2001) and could produce total revenue of around $30 billion over the next five years." THEIR SUMMARY: "Stock price as of analysis date: $28.00 Flextronics' favorable growth prospects and reasonable valuation outweigh near-term uncertainties." WHOLE REVIEW: The Scoop \| 12-05-00 Stock price as of analysis date: $28.00 Flextronics' favorable growth prospects and reasonable valuation outweigh near-term uncertainties. Read Morningstar's Take The Bulls Say Flextronics is the second-largest contract manufacturer, with a global manufacturing base, a diverse business mix, and a Who's Who of customers. After the recent technology bloodbath, the stock is trading at a very reasonable forward price/earnings ratio of just over one half its estimated long-term growth rate. The trend toward outsourcing is likely to continue as more firms recognize the benefits, both in time to market and operating efficiency, of "virtual manufacturing." Profit margins and asset turnover should gradually improve as a result of the increased availability of electronic components and integration of recent acquisitions. Flextronics' blockbuster outsourcing deal with Motorola MOT kicks in next year and could produce total revenue of around $30 billion over the next five years. The Bears Say Estimates for 2001 could prove too high if end-market conditions continue to deteriorate. Contract manufacturers like Flextronics take on many of the risks that original equipment manufacturers try to avoid, such as carrying inventory and investments in plant and equipment. Startup costs in connection with the company's blockbuster Motorola agreement will pressure near-term earnings. By closely aligning itself with Motorola, Flextronics may be limiting its ability to expand its business with other large telecom customers, such as Lucent LU.

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