Flextronics CEO says sees business improving, says report

Flextronics International Ltd. (NasdaqNM:FLEX) saw its long-suffering printed circuit board business turn profitable in the last month, its chief executive said on Tuesday.According to a Reuters report, at a Banc of America Securities technology conference here, Michael Marks said the return to profitability for the unit was a leading indicator that made him more bullish about the company's prospects."Business is clearly better. We are in the early stages of a recovery," he said. "That's a clear indicator in our view that the world's getting better."Demand for printed circuit boards reflects business conditions for telecommunications and other information technology companies, Marks said.Marks, however, noted that business in Europe has not improved and may still even be weakening a bit.He also said tech companies as a whole were likely to report "spotty" results for the third quarter before a more sustained improvement next year.Flextronics last month said its outlook for its fiscal second and third quarters remains unchanged despite improved business in July, a relatively strong August and increasingly optimistic customers.Flextronics and its rivals, including Sanmina-SCI Corp. (NasdaqNM:SANM) and Solectron Corp. (NYSE:SLR ), have been hammered by the long-running technology and telecommunications slumps. After painful restructuring in recent years as customers slashed orders, their industry is hoping corporate and consumer spending on tech equipment is finally set to recover.Banc of America Securities analyst Joseph Wolf said Flextronics was likely to benefit in the near term from seasonally strong business, reflecting the company's broad consumer-market exposure and new product launches.However, Wolf said the outlook for contract manufacturers and a tech rebound in 2004 remained uncertain."The pressing question right now is what kind of follow- through will there be for these businesses next year?" Wolf said.Shares in Flextronics rose 78 cents, or 5.5 percent, to $14.88 in afternoon trade on Tuesday on the Nasdaq stock market.Source: Reuters