Benchmark Electronics, Inc. (BHE), Freescale Semiconductor Ltd (FSL): Four Electronics Company Earnings to Look Into

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With the current lull in military spending, sales in its Government Systems business have suffered somewhat. The company is more than offsetting that downturn through growth from commercial sectors, including automotive and marine. Its expansion into new avenues of business has been partly by way of acquisition, including the recent buyout of Traficon, a producer of traffic monitoring solutions. It had entered the marine market with the acquisition of Raymarine a number of years ago.

In total, FLIR Systems, Inc. (NASDAQ:FLIR) will probably report second-quarter share earnings of about $0.37, as compared with $0.30 in 2012. Its shares are trading at a P/E ratio of 16.3, given estimates of $1.60 and $1.80 for this year and next, respectively.

A Networking-heavy EMS giant seeing its shares climb

Flextronics International Ltd. (NASDAQ:FLEX) derives about 47% of its revenue from the Integrated Network Solutions unit, focused on telecom networking. Sales from the division were trending lower, having fallen 10% in the March quarter. Demand has stabilized, however. Plus, revenues from its High Reliability Solutions business are also apt to be reported as flat in the June quarter. Still, its High Velocity Solutions and Industrial & Emerging Industries divisions, comprising about 22% and 17% of sales, respectively, ought to post sales increases.

Overall, the company may well report per-share profits of about $0.14 in the June quarter, as compared with $0.23 in the previous year. The forward P/E ratio is 8.0, based on 2013 earnings of $0.80 per share and 2014 earnings of $1.00 per share. Flextronics International Ltd. (NASDAQ:FLEX)’ fiscal year ends in March of the following year. The basis for the expected earnings recovery are the aforementioned upturn in the network unit that should support a return to form for revenue and margins.

Where to Invest

Benchmark Electronics, Inc. (NYSE:BHE) stock is a good choice for patient investors, in light of its likely earnings recovery as it continues to build its base of revenues. Freescale Semiconductor Ltd (NYSE:FSL), as previously mentioned, is best-suited for those aggressive accounts anticipating the company’s rebound to material profit levels. FLIR Systems, Inc. (NASDAQ:FLIR) shares, up more than 20% over the last two months, may have further positive momentum if earnings grow as expected. However, at its current price, its appreciation potential has dimmed a bit. Finally, Flextronics International Ltd. (NASDAQ:FLEX), as one of the top EMS providers, is a solid investment. In all, a cyclical rebound is underway for several of these companies and this may be a good time to consider them.

Damon Churchwell has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Damon is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

The article Four Electronics Company Earnings to Look Into originally appeared on is written by Damon Churchwell.

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