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Tuesday, April 29, 2008

Flextronics (FLEX) 4Q:2008 results

Ok, I'm just not interested in their results. Here's a little sample of the Q&A for why:

Thank you very much. Congratulations, gentlemen. Quick question, on your June outlook, could you give us a little bit of breakdown about the organic? I know you recently closed some acquisitions.

You know, Jim, we -- I don't think we have that number off the top of our head as to what is acquisition related and what is organic, so I think we're going to have to get back to you and break that out. Sorry for that.

That kinda sums up my issue. The company did come back and say that $150mm of their increased guidance is acquisition related. Ok. I'm the King of Siam. I have about as much faith in that statement. I'm not saying they're liars. I just think those numbers are fungible on their side and what's acquisition growth this year becomes "organic" next. It doesn't change the long-term model which is they're roll-ups that buy unprofitable manufacturing facilities in exchange for guaranteed revenue commitments. It's a shell game and I think shareholders rarely find the ball in them.

They do touch a lot of customers I care about and they're a huge consumer of semiconductors, so I pay attention to their commentary about end markets.

They're looking to acquire notebook computer contracts. Check. Strong growth against a backdrop of a rocky tech trendline.

They're not really seeing weakness in the infrastructure or consumer markets but their exposure there is limited.

Inventories spiked decently but who knows what's from the Solectron acquisition and what's theirs -- they're not really saying.

Servers are strong despite a lousy server market. They're going to do a robust LCD TV business. Industrial is strong. Medical is strong. Automotive is "actually very, very strong." Automotive very, very strong?

King of Siam, guys. Look it up.

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