Why Is Flex (FLEX) Down 10.2% Since Last Earnings Report?

Core Viewpoint - Flex reported strong Q3 fiscal 2025 earnings, with adjusted EPS of 77 cents, exceeding estimates by 20.3% and showing a year-over-year increase from 54 cents [2] Financial Performance - Revenues for Q3 fiscal 2025 rose 2.1% year-over-year to $6.6 billion, surpassing consensus estimates by 5.5% [2] - Non-GAAP gross margin expanded by 150 basis points to 9.3%, while non-GAAP operating income increased to $399 million from $314 million in the prior year [5] - Selling, general & administrative expenses increased by 17.6% year-over-year to $241 million [7] Segment Performance - The Flex Reliability Solutions Group maintained stable revenues at $3 billion, with strength in power and medical devices offsetting automotive sector challenges [3] - The Flex Agility Solutions Group saw revenues increase by 4% to $3.6 billion, driven by robust demand in cloud and consumer-related markets [4] Cash Flow and Share Repurchase - Cash and cash equivalents stood at $2.31 billion, while long-term debt was $3.15 billion as of December 31, 2024 [8] - The company generated $413 million in cash flow from operating activities and repurchased $200 million worth of stock during the quarter [8][9] Future Outlook - For Q4 fiscal 2025, Flex expects revenues between $6 billion and $6.4 billion and adjusted earnings of 65-73 cents per share [10] - The company raised its fiscal 2025 revenue guidance to between $25.4 billion and $25.8 billion, up from the previous range of $24.9 billion to $25.5 billion [12] - Adjusted earnings per share for fiscal 2025 are now projected to be between $2.57 and $2.65, an increase from earlier estimates [12] Market Sentiment - Consensus estimates for Flex have trended upward, with a 7.02% shift in estimates over the past month [13] - Flex holds a Zacks Rank 2 (Buy), indicating expectations for above-average returns in the coming months [15]