Flex net profit down after Huawei problems
Made-to-order electronics maker Flex Ltd posted a net profit fall of 61 percent in the last fiscal quarter, because of uncertainties surrounding Huawei Technologies, the company said on Friday.
Goods and products, worth over US$100 million, are in limbo at Flex after US tech sanction on Huawei, industry sources said.
Flex, with dual headquarters in US and Singapore, posted a profit fall of 61 percent to US$44.9 million in its first fiscal quarter (March 28 to June 28) from a year ago.
It launched efforts to reduce costs and would continue that process through the current fiscal year, including scaling down its Huawei-dedicated operations and reducing exposure to certain high-volatility products in China and India.
Contract electronics makers, like Foxconn and Flex, produce products for firms like Apple, Huawei and Xiaomi.
The company has also “seized” Huawei’s goods valued 700 million yuan (US$103 million) after US authority sanction on Huawei, media reported.
Sources close to Huawei confirmed the issues.
"Flex and Huawei have had a long-standing and successful partnership. We have worked with them to find an agreeable solution. This change is unfortunate,” Flex Chief Executive Revathi Advaithi said during an earnings call conference.