Flextronics International (FLEX) Message Board

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Technology Stocks : Flextronics International (FLEX)

FLEX 63.63

+1.6%

3:59 PM EST

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To: John Morelli who wrote (421)	12/4/1997 9:49:00 AM
From: solderman.com	Read Replies (3) of 1422

FLEXF is weaker on ERICY downgrades by Robertson Stephens and Merrill Lynch IMHO. ERICY accounts for 30%+ of FLEXF revenues -you can check it on the 10-k that was filed recently: "The Company's largest customers during both the three month and six month periods ending September 30, 1997 were Ericsson and Advanced Fibre Communications. Net sales to Ericsson for the three and six month periods accounted for approximately 30% of net consolidated sales for both periods." When the downgrades came on out on ERICY it was only a matter of time before the market drew the connection and punished FLEXF. Here are the downgrades: RESEARCH ALERT - Ericsson downgraded NEW YORK, Dec 2 (Reuters) - BancAmerica Robertson Stephens said it cut its rating on shares of Ericsson to long-term attractive from buy, and cut its revenue estimates. -- Reductions reflect increased concerns about prospective subscriber growth rates and the negative impact that lower-than-expected growth cuold have on handset revenues and margins, analyst George Robertson said. -- Reduced fiscal 1998 revenue estimates for Ericsson from 213.6 billion Swedish krona to 206.0 billion krona and its 1998 earnings estimates to $1.76 per ADR (American Depository Receipt) from $2.00 per ADR. -- ''We are lowering our rating on Ericsson...because we were well above consensus and feel that others who had estimates in the upper range will lower their numbers, thus reducing the consensus figures,'' Robertson said. -- Also felt lower than expected worldwide handset sales will hurt stock price of all handset makers. Ericsson Merrill cut ERICY from BUY to NEUTRAL. Hopefully the acquisition of Neutronics will dilute the effect ERICY has on FLEXF's fortunes, and diversify the customer base.

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