Flex Ltd FLEX is slated to report third-quarter fiscal 2025 results on Jan. 29.

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The Zacks Consensus Estimate for fiscal third-quarter revenues is pegged at $6.21 billion, which indicates a decline of 12.6% from the year-ago quarter’s reported figure. The consensus mark for earnings is pegged at 63 cents per share, down 11.3% year over year.

For the third quarter of fiscal 2025, Flex expects revenues to be between $6 billion and $6.4 billion. Management expects adjusted earnings of 60-66 cents per share, excluding 7 cents for net restructuring charges, 8 cents for stock-based compensation expense and 3 cents for net intangible amortization.

The company’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 14.2%, on average.

Factors to Note for FLEX’s Q3 Results

For the Reliability Solutions business, management forecasts sales in the fiscal third quarter to remain flat to down mid-single digits, owing to macro-related softness in the automotive vertical. Weaker core industrial demand is likely to have acted as an additional headwind.

Agility Solutions segment revenues are anticipated to be down low to high single digits, owing to weakness in networking and enterprise IT spending, and weak durable goods market.

However, the company’s performance is likely to have been cushioned by steady momentum in medical devices, cloud and data center power verticals.

Flex Ltd. Price and EPS Surprise

Flex Ltd. price-eps-surprise | Flex Ltd. Quote

The company is likely to have benefited from several program ramps including cloud, power and auto, and secular trends. FLEX remains focused on advancing cloud, power and automotive businesses through strategic programs. These initiatives are likely to have positively impacted Flex’s performance in the fiscal third quarter as well as the latter half of the fiscal year. These factors are favorably positioning Flex for the AI-powered technology shift, prevalent in the industry, from grid to chip and from the cloud to the edge.

Margin improvement is likely to have been driven by a favorable mix and continued operational execution.

Recent Key Highlights

On Nov. 20, 2024, Flex announced the completion of its $325 million acquisition of Crown Technical Systems. This deal expands the company’s power portfolio and boosts its presence in the U.S. data center and utility power markets.

On Nov. 14, 2024, Flex acquired JetCool Technologies, a top liquid cooling provider for data centers. The acquisition strengthens Flex's data center and power offerings, enabling hyperscale and enterprise customers to address increasing challenges with power, heat and scalability in the AI era.

What Our Model Says About Flex

Our proven model does not predict an earnings beat for FLEX this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.

FLEX has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks you may consider, as our model shows that these have the right combination of elements to beat on earnings this season.

V.F. Corporation VFC currently has an Earnings ESP of +4.30% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here. 

VFC is scheduled to report quarterly earnings on Jan. 29. The Zacks Consensus Estimate for VFC’s to-be-reported quarter’s earnings and revenues is pegged at 34 cents per share and $2.75 billion, respectively. Shares of VFC have gained 50.3% in the past year.

Logitech International S.A. LOGI presently has an Earnings ESP of +4.96% and a Zacks Rank #2. LOGI is scheduled to report quarterly numbers on Jan. 28. The Zacks Consensus Estimate for LOGI’s to-be-reported quarter’s earnings and revenues is pegged at $1.37 per share and $1.24 billion, respectively. Shares of LOGI have risen 7.3% in the past year.

ServiceNow, Inc. NOW has an Earnings ESP of +0.91% and a Zacks Rank #2 at present. NOW is scheduled to report quarterly figures on Jan. 29. The Zacks Consensus Estimate for NOW’s to-be-reported quarter’s earnings and revenues is pegged at $3.58 per share and $2.95 billion, respectively. Shares of NOW have increased 47.9% in the past year.

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