Shares of Anaheim-based Multi-Fineline Electronix Inc., a maker of flexible circuit boards for cell phones and other mobile devices, fell Monday after the company gave a cautious outlook for the current quarter.
Shares fell as much as 13% before ending the day flat on a market value of about $290 million.
The company, also called M-Flex, gave a more conservative outlook for the current quarter, citing “ongoing uncertainty surrounding the global economy,” Chief Executive Reza Meshgin said.
M-Flex didn’t give any hard numbers for what it expects to see.
Sales for the December quarter are expected “to be at least as high as the net sales level we achieved” during the same period a year earlier, according to Meshgin, which totaled $184 million.
He also said that the company’s profits are likely to shrink.
“We also currently expect that gross margin percentage will fall within our targeted 10% to 15% range, based on our projected product mix and leveraging of manufacturing costs.”
For the December quarter, analysts are looking for profits of $10 million on revenue of $206 million.
For the past few quarters, M-Flex has been dealing with higher-than-expected costs associated with expanding production in China.
The company has been growing and updating its operations in China and leasing other sites to keep up with demand, including a factory in Malaysia.
In its post-earnings outlook, M-Flex said it’s set to slow down on its expansion plans in order to spread out its costs.
“We are taking a more conservative approach to our near-term capacity expansion plans,” Meshgin said. “We have made the decision to extend the completion date of our new manufacturing facility in China and manage development activities and requisite capital expenditures in discrete phases.”
The outlook comes on the heels of M-Flex’s results for the three months ended September, which beat analysts’ expectations for sales but fell short on profits.
The company posted revenue of $213 million, up 28% over the same period a year earlier and beating analysts’ expected $198 million in sales.
Including charges of about $10 million for restructuring costs and tax expenses, M-Flex saw profits of $7 million, more than double the $3 million it reported in the year-ago quarter but falling short of analysts’ expectation of $9 million in profits.
M-Flex’s shares are off about 40% in the past year.
