Xbox 360 maker reports record sales

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Xbox 360 maker reports record sales

Flextronics tops US$4bn in most recent quarter, aims for US$19bn a year.

Flextronics, the manufacturer of well-known consumer electronics products like Microsoft's Xbox 360, reported a six per cent increase in revenues to $4.059bn in its most recent fiscal quarter. 

The company is optimistic about the rest of the fiscal year, aiming for revenues of US$19bn compared to US$15.3bn in its previous fiscal year.

Flextronics is generally seen as the world's largest contract electronics manufacturer, or electronics manufacturing services (EMS) provider.

The company focuses on manufacturing, leaving its better known partners to handle marketing, sales and end-user relations.

Among the famous products manufactured by Flextronics at its factories in 30 countries around the world are Sony-Ericsson mobile phones, HP inkjet printers and storage products, and Microsoft's Xbox 360 and PC peripherals. 

As well as manufacturing, Flextronics often has some input into the design of products.

"There has been a re-acceleration of significant growth in our core EMS business, which includes design, vertically integrated manufacturing services, components and logistics," said chief executive Mike McNamara.

Flextronics' latest results are for the three months to 30 June, the first quarter of the company's 2007 fiscal year.

Net income was US$85m, up four per cent from US$59m in the same quarter one year earlier. Flextronics is headquartered in Singapore and listed on the US Nasdaq exchange.

The company plans to double capital expenditure this year, as it expects orders to continue to increase. Flextronics is looking to generate revenues of up to US$4.9b in the next quarter.

"Fiscal 2006 was a very strong year in terms of incremental business wins from both new and existing customers. As a result, we exceeded revenue and earnings expectations in the June quarter and have increased our revenue growth rate expectations for fiscal 2007 to approximately 25 per cent," said McNamara.

Flextronics' two largest customers, Sony-Ericsson and HP, each accounted for more than 10 per cent of revenue during the previous fiscal year which ended March 31.

Flextronics has not released any details of manufacturing for other partners, such as Microsoft.

The company was one of the makers of the original Xbox console and is one of three main contractors for the newer Xbox 360, work on which started last autumn.

The other prime contractors are Celestica and Taiwan's Wistron, an offshoot of the giant Acer Group. These companies carry out most of their Xbox manufacturing in southern China.

Data from Flextronics shows orders from Asia growing fastest over the past five quarters. Asia now accounts for 59 per cent of the company's revenue, up from 51 per cent in the quarter ended June 2005.

During the same period, the percentage of orders from Europe fell from 28 per cent to 19 per cent, while US orders remained relatively stable.
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