Flextronics CEO Says ‘Softer’ Economy to Weaken Sales Growth
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By Jennifer Tan and Mark Lee - Sep 26, 2011 10:13 PM ET
Flextronics International Ltd. (FLEX) Chief Executive Officer Michael McNamara said global economic growth has been “softer” than he anticipated a year ago, which may weaken the company’s revenue expansion this year.
“We expect to grow at another couple billion dollars organically this year,” McNamara said in an interview with Bloomberg Television from Singapore today. The company, which supplies cameras and battery chargers for Apple Inc. (AAPL) devices, increased revenue by about $4.6 billion in the year through March, or 19 percent to $28.7 billion.
Flextronics’ customers include Hewlett-Packard Co., Lenovo Group Ltd., Huawei Technologies Co., Honeywell International Inc. and Johnson & Johnson. McNamara said he expects more outsourcing in a slower environment and doesn’t see any downside surprises to revenue, citing strength in the industrial, medical and automotive industries.
McNamara said he expects about 2 percent to 3 percent of the Singapore-based company’s production capacity to shift to Mexico from Asia in the next two to three years, partly as wages increase in China.
Flextronics had about $1.6 billion of cash as of July and will use it to fund its growth and to buy back stock, the CEO said. In July, the company’s board authorized the repurchase of as much as $200 million of the company’s outstanding ordinary shares. |
