SAN JOSE - Flextronics posted record GAAP net income of $98.7 million, up 361%, for its third quarter. The EMS firm also topped previous records for revenues, reporting sales of $4.3 billion, up 3% over last year.

The company recorded restructuring charges of $30.7 million during the quarter, primarily related to closures and consolidations. Excluding one-time items, net income rose 24% to $116.3 million.

The company reaffirmed previous revenue guidance of $3.8 billion to $4.2 billion for the March quarter, and $4.1 billion to $4.5 billion in the June quarter. The company told analysts that end-markets are solid.

For the quarter, cash conversion cycle was 12 days and inventory turns were 11.3 times. Return on invested tangible capital rose to an all-time quarterly high of 30.5%, up from 21.6% last year.

Gross margin was 7%, the company's highest in three years.

The company ended the December quarter with a record cash balance of $1.09 billion.

In a press statement, Chief executive Michael Marks said, "Our operating metrics are better now than they have been in many years. Key metrics such as sales, gross profit, GAAP net income, cash conversion cycle, fixed assets to sales, cash and liquidity and ROITC, are better now than they have ever been in our history. With a return on tangible invested capital of greater than 30%, we are now generating a very good return for our shareholders."

"We continue to believe that we can increase gross margins and operating profit, while reducing SG&A as a percentage of sales. The operating margin improvement over past several quarters demonstrates that our improvement initiatives are working and suggests that our long-term operating margin target of 5% is realistic."

"Competitively, we are in solid shape. Our major long-term initiatives, including our industrial parks, vertical integration and design activities, continue to work well. Our pipeline of potential opportunities continues to be quite robust. We are optimistic that a number of these opportunities will be realized over the next several quarters, and believe that we have solid growth in both sales and profits ahead of us," Marks said. 

On a conference call today with analysts, Marks said that industry growth would be modest this year. "I don't think the end markets are going to be great."

The company saw a jump in its North American sales. When NAFTA opened up Mexico, Marks said consumer products flooded that country - "products that belonged in Asia." Those products have since been moved to Asia. Meanwhile, most EMS companies have severely cut their U.S. footprints. "The drop in the dollar, higher taxes in China, the cost of oil [going] up": these favor trends companies that have global footprints, Marks asserted, explaining why the firm is seeing domestic gains.

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