Flextronics loses key customer RIM; sees weak fourth-quarter
(Reuters) - Contract manufacturer Flextronics Inc (FLEX.O) forecast fourth-quarter results below Wall Street expectations, and said it now expects almost no revenue from key customer Research In Motion RIM.TO RIMM.O, sending its shares down 6 percent after the bell.
"The December quarter marks the last quarter where our revenues reflect meaningful business with RIM," Chief Financial Officer Paul Read said on a conference call with analysts. RIM, which contributed about $100 million in revenue in the third quarter, will now bring in almost nothing.
RIM accounted for more than 10 percent of Flextronics' net sales of $29.4 billion in fiscal 2012.
Flextronics also said it would close factories and cut jobs, and take related charges over the December and March quarters.
The company said it expects fourth-quarter adjusted earnings of between 11 cents and 15 cents per share, on revenue of $5 billion to $5.3 billion.
Analysts were expecting adjusted earnings of 20 cents per share, on revenue of $5.69 billion, according to Thomson Reuters I/B/E/S.
Flextronics' customers include Apple Inc (AAPL.O), Microsoft Corp (MSFT.O), Hewlett-Packard Co (HPQ.N) and Xerox Corp (XRX.N).
In the fourth quarter, the company expects to take an additional pre-tax restructuring charge of between $100 million and $125 million, which comprises employee severance and benefit costs.
Net income more than halved to $32 million, or 5 cents per share, in the third quarter, from $106 million or 15 cents per share, a year earlier.
Revenue fell about 18 percent to $6.12 billion.
Excluding items, the company earned 21 cents per share.
Analysts had expected adjusted earnings of 21 cents per share, on revenue of $6 billion.
Flextronics shares were down about 6 percent at $6.30 after the bell. They closed at $6.72 on the Nasdaq on Thursday.
(Reporting by Chandni Doulatramani in Bangalore; Editing by Supriya Kurane)
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