Anaheim-based Multi-Fineline Electronix Inc. on Tuesday said falling prices for circuit boards drove a 79% drop in profits for the December quarter but forecast a recovery with anticipated strong sales to its largest customers.
The circuit board maker, known as M-Flex, said net income was $3.7 million for the recently ended quarter, down from $17.3 million a year ago.
Chief Executive Phil Harding said falling prices for circuit boards and a 24% drop in sales to a key mobile phone maker,likely Motorola Inc.,drove the steep profit decline.
Sales to the phone maker, which M-Flex didn’t name, are up 12% in the current quarter, according to Harding.
Motorola makes up some three-fourths of M-Flex’s $500 million in yearly sales.
Along with double-digit gains from its next two customers, Harding said the company anticipates growth for the remainder of the year.
Investors drove up M-Flex’s shares in afterhours trading.
Earlier this week, M-Flex said a lawsuit it filed against parent WBL Corp. over an unwanted acquisition was dismissed.
A Delaware court threw out the litigation on technical issues.
M-Flex had planned last year to acquire another WBL subsidiary, MFS Technology Inc., but balked when MFS reported a steep sales drop.
WBL is said to be “seeking advice from its professional advisers with regard to its position on the offer.” Reports from Singapore suggest WBL’s interest in the deal has waned.
