Come on guys. Lets get this thread going again. Reports are out that EMS should grow 40% (FLEX) in 2003. Here is a recent report today from Lehman which I take issue with.
LOS ANGELES, Jan 3 (Reuters) - Flextronics International Ltd. (FLEX), long the world's No. 2 contract manufacturer, will surpass long-time No. 1 Solectron Corp. (SLR) in calendar 2002 on a revenue basis, brokerage Lehman Brothers said on Thursday.
In its monthly review of top-tier electronic manufacturing services (EMS) companies, Lehman projected 2002 revenues of $14.4 billion for Flextronics, up from $12.9 billion in 2001, versus revenues of $12.6 billion for Solectron, down from $16.1 billion in 2001.
However, for fiscal 2002, the consensus analyst estimate, according to Thomson Financial/First Call, is for Solectron to remain No. 1 in revenues, at $13.7 billion (from 18 brokers) versus Flextronics' $13 billion (from 20 brokers).
Flextronics' fiscal year ends in March, while Solectron's fiscal year ends in August.
For calendar 2002, Lehman forecast earnings per share for Flextronics of 82 cents, second-best in the EMS top tier behind Celestica Inc. (CLS) at $1.52. The Solectron forecast is for earnings of 17 cents, worst among the top five.
For fiscal 2002, Lehman projected both companies would draw their largest share of revenues from the data networking and telecom products sector: 35 percent for Flextronics and 54 percent for Solectron.
Both stocks were battered in 2001 by the global slowdown in technology spending, with Solectron losing 67 percent on the year and Flextronics losing 16 percent.
On the basis of market capitalization, Solectron is the third-largest company in the EMS sector, at $9.9 billion, behind Flextronics at $12.8 billion and Sanmina-SCI Corp. (SANM) at $11.3 billion.
Shares in Flextronics were up 6.8 percent at $26.69 in afternoon trade on Nasdaq. Shares in Solectron were up 1.2 percent at $12.07 in afternoon trade on the New York Stock Exchange. REUTERS
I think these projections are just base business and don't factor in new deals, new outsourcing opportunities etc. And SLRs earnings should be higher on a cash basis anyway.
Rich |
