Flextronics to benefit from further re-valuation (FLEX 1Q06 conf call)

by: Ezra Marbach

Flextronics (ticker: FLEX) CEO Michael Marks welcomes the possibility of further re-valuation of the Yuan by the Chinese government. Here are key quotes from management's Q1 2006 earnings results conference call:

...we've been planning for some kind of revaluation.

....nobody really knows whether this is, you know, going to be a 2% change for a long time or whether that 2%….doesn't turn into something more significant over time. We view this, essentially, as a big opportunity for Flextronics.

....we've been pointing out....for a year now....we're growing our business in the Americas. We view that the increasing -- potentially increasing costs in Asia to be an advantage to our Company.

....the more flexibility they (customers) need in their manufacturing system to be able to move around as costs change, the better that is for Flextronics, which has, I mean we may be the best positioned of any company in the world today in terms of having such major operations in all the major markets. And so we -- we actually would like to see a little bit of a move back from -- from everything moving to Asia. We're seeing that. We've now had eight quarters in a row of increasing sales in the Americas -- increasing revenue in the Americas. So, we think in the longer term, some increase in cost in China is probably beneficial to us.

(Quotes are from the CCBN StreetEvents transcript.)


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