-
- News
- Books
Featured Books
- smt007 Magazine
Latest Issues
Current IssueWhat's Your Sweet Spot?
Are you in a niche that’s growing or shrinking? Is it time to reassess and refocus? We spotlight companies thriving by redefining or reinforcing their niche. What are their insights?
Moving Forward With Confidence
In this issue, we focus on sales and quoting, workforce training, new IPC leadership in the U.S. and Canada, the effects of tariffs, CFX standards, and much more—all designed to provide perspective as you move through the cloud bank of today's shifting economic market.
Intelligent Test and Inspection
Are you ready to explore the cutting-edge advancements shaping the electronics manufacturing industry? The May 2025 issue of SMT007 Magazine is packed with insights, innovations, and expert perspectives that you won’t want to miss.
- Articles
- Columns
- Links
- Media kit
||| MENU - smt007 Magazine
Fitch Affirms Flextronics at BBB-; Outlook Stable
June 26, 2015 | Business WireEstimated reading time: 1 minute
Fitch Ratings has affirmed the ratings for Flextronics International Ltd. (Flextronics), including the Long-Term Issuer Default Rating at 'BBB-'. Fitch's action affects $4.2 billion of debt, including the undrawn $1.5 billion revolving credit facility (RCF). The Rating Outlook is Stable.
The ratings and Outlook reflect Fitch's expectations for stable profitability and solid annual free cash flow (FCF) through the intermediate term, despite capital spending returning to normalized levels beginning in the current fiscal year.
Fitch expects flat-to-positive low-single-digit organic revenue growth for fiscal 2016, driven by new program ramps more than offsetting lower sales from Motorola Mobility following its acquisition by Lenovo Group Ltd.
Nonetheless, Fitch expects low-single-digit revenue growth through the cycle, driven by strong customer relationships and share in mature traditional end-markets. Fitch believes faster-growing end-markets, including medical, automotive, and industrial automation, will drive positive mid-cycle revenue growth.
Fitch expects profitability will gradually strengthen over the longer term from a richer sales mix of non-traditional markets and lower exposure to high-velocity markets, particularly handsets. Fitch expects operating EBITDA will trough at $1.2 billion in the near term and expand through intermediate term.
Fitch expects more than $500 million of annual FCF through the cycle, driven by strengthening profitability and cash flow from the liquidation of inventory during a downturn. Additionally, Fitch believes Flextronics' increasing ability to moderate capital spending in the face of lower demand supports the industry's maturity and strengthened FCF profile.
Fitch expects Flextronics will use annual FCF for acquisitions and share repurchases, and that acquisitions will be focused on access to technologies and customers in faster-growing markets. At the same time, Flextronics is targeting 50% of FCF to be distributed to shareholders through stock buybacks.
Fitch anticipates Flextronics would fund larger acquisitions with debt and the company recently issued $600 million of senior notes for general corporate purposes, including the EUR457 million ($494 million) acquisition of automotive mirror electronics supplier, MCi.
Credit protection measures should remain sound for the rating. Fitch expects total leverage (total debt-to-operating EBITDA) below 3x and debt adjusted for off-balance-sheet accounts receivable securitization and operating leases below 4x. Fitch estimates total leverage was 2.1x, for the fiscal year ended March, 31, 2015, pro forma for the recent senior notes offering.
Suggested Items
Inside Aimtron’s Cross-border EMS Strategy
07/08/2025 | Nolan Johnson, SMT007 MagazineMukesh Vasani immigrated from a very small farming village in India to the U.S. in 1995 as a civil engineer. After shifting into electronics, Mukesh built his Chicago-based company, Aimtron, into a successful enterprise by combining quality with competitive pricing. He leveraged his roots in India to expand manufacturing without compromising on quality.
Tariff Effects and China Subsidies Soften 1Q25 Downturn; Foundry Revenue Decline Narrows to 5.4%
06/09/2025 | TrendForceTrendForce’s latest investigations find that the global foundry industry recorded 1Q25 revenue of US$36.4 billion—a 5.4% QoQ decline. The downturn was softened by last-minute rush orders from clients ahead of the U.S. reciprocal tariff exemption deadline, as well as continued momentum from China’s 2024 consumer subsidy program.
Nordson Reports Q2 Fiscal 2025 Results and Q3 Guidance
05/30/2025 | BUSINESS WIRENordson Corporation reported results for the fiscal second quarter ended April 30, 2025. Sales were $683 million compared to the prior year’s second quarter sales of $651 million.
Rocket Lab Enters Payload Market with Agreement to Acquire Geost
05/28/2025 | BUSINESS WIRERocket Lab Corporation, a global leader in launch services and space systems, today announced the signing of a definitive agreement to acquire the parent holding company of Geost, LLC (Geost).
Global NEV Sales Top 4 Million in 1Q25; BYD Remains Dual Leader, Xiaomi Enters Top 10 in BEV Segment
05/21/2025 | TrendForceTrendForce’s latest reports reveal that global NEV sales—including BEVs, PHEVs, and FCEVs—reached 4.02 million units in the first quarter of 2025, marking a 39% YoY increase. NEVs accounted for 18.4% of total global auto sales for the quarter.