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Molex Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: January 24, 2013 01:05PM

Molex Inc. (MOLX) filed Quarterly Report for the period ended 2012-12-31. Molex, Inc. has a market cap of $4.8 billion; its shares were traded at around $27.08 with a P/E ratio of 17.7 and P/S ratio of 1.4. The dividend yield of Molex, Inc. stocks is 3.1%.



Highlight of Business Operations:

Net revenue increased 12.8% and 5.1% during the three and six months ended December 31, 2012, respectively, compared with the prior year periods primarily due to an increase in customer demand in the telecommunications and infotech markets, partially offset by lower demand in the consumer and industrial markets. The increased customer demand in the telecommunications and infotech markets resulted in sales to a consumer electronics company, directly and indirectly, that exceeded 10% of net revenue during the three and six months ended December 31, 2012. Gross margin decreased during the three and six months ended December 31, 2012 compared with the prior year periods primarily due to changes in the mix of product sales and start-up costs related to new product introductions. Selling, general and administrative expenses were higher during the three and six months ended December 31, 2012 compared with the prior year periods to support the increase in net revenue. Selling, general and administrative expenses decreased as a percentage of net revenue over prior year periods. Income from operations increased during the three months ended December 31, 2012 primarily due to higher net revenue compared with the prior year period, but decreased during the six months ended December 31, 2012 as higher net revenue was offset by lower gross margin and higher selling, general and administrative expenses compared with the prior year period.

Selling, general and administrative expenses increased $18.0 million and $11.9 million for the three and six months ended December 31, 2012, respectively, compared with the prior year periods, but decreased as a percentage of net revenue. The increase in selling, general and administrative expenses was primarily due to the increase in net revenue and investments in research and development to support new product introductions. We also increased investments in business development to drive future growth. Selling, general and administrative expenses for the six months ended December 31, 2012 were reduced by $9.9 million due to property insurance proceeds for damages from the earthquake and tsunami that occurred in Japan during the third quarter of fiscal 2011. The impact of foreign currency translation decreased selling, general and administrative expenses approximately $5.9 million and $1.7 million for the three and six months ended December 31, 2012, compared with the prior year periods.

Our order backlog on December 31, 2012 was approximately $404.0 million compared with order backlog of $445.3 million at September 30, 2012 and $346.3 million at December 31, 2011. Orders for the three months ended December 31, 2012 were $919.7 million compared with $943.9 million and $815.3 million for the three months ended September 30, 2012 and December 31, 2011, respectively. Orders for the three months ended December 31, 2012 decreased $24.2 million over the sequential quarter and fell short of net revenue during the period as customer demand weakened. Orders for the three months ended December 31, 2012 improved compared with the prior year period due primarily to new product introductions in the telecommunications and infotech markets.

The Connector segment sells primarily to the telecommunications, infotech, consumer and automotive markets. Organic net revenue and segment net revenue increased during the three and six months ended December 31, 2012 compared with the prior year periods as increased demand for new product introductions in the telecommunications and infotech markets offset lower demand in the consumer market. The increase in organic net revenue was partially offset by price erosion, which is generally higher in the Connector segment compared with our Custom & Electrical segment. Foreign currency translation decreased net revenue by $6.0 million and $21.0 million for the three and six months ended December 31, 2012, respectively, primarily due to a weaker euro and Japanese yen against the U.S dollar.

The Custom & Electrical segment sells primarily to the industrial, telecommunications and infotech markets. Custom & Electrical segment organic net revenue decreased for the three months ended December 31, 2012 compared with the prior year periods primarily due to lower customer demand in the industrial market and lower customer demand for networking devices in the infotech market. Segment organic net revenue increased slightly for the six months ended December 31, 2012 as higher net revenue earlier in the period was partially offset by weakening demand in the industrial market and lower demand for networking devices in the telecommunications market. Foreign currency translation decreased net revenue $1.9 million and $11.9 million for the three and six months ended December 31, 2012, respectively, primarily due to a weaker euro against the U.S. dollar compared with the prior year periods. We acquired Affinity Medical Technologies, LLC during the second quarter of fiscal 2013 and completed an asset purchase of Temp-Flex Cable, Inc. during the second quarter of fiscal 2012.

Read the The complete Report



Stocks Discussed: MOLX,
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