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Flex Ltd. (FLEX) reported second-quarter fiscal 2026 adjusted earnings per share (EPS) of 79 cents, which surpassed the Zacks Consensus Estimate by 5.3%. The bottom line compared favorably with 64 cents posted in the prior-year quarter.
Revenues increased 4% year over year to $6.8 billion. Also, it beat the consensus mark by 2%. The uptick was driven by strong data center growth in both the cloud and power end markets, despite a complex macroeconomic environment. The company’s diversified portfolio, spanning multiple industries—from cloud infrastructure and AI data centers to automotive and healthcare—continues to be a key strength.
Flex has incorporated the impact of tariffs into its revenue guidance, noting that tariffs remain largely a pass-through. Despite challenges from the Ukraine facility shutdown and unfavorable FX, the company remains confident in its growth outlook. With 4% revenue growth in the first half and stronger demand expected in Power and Cloud in the fiscal fourth quarter, Flex has revised its fiscal 2026 revenue guidance to $26.7–$27.3 billion, up $500 million from the prior midpoint. It expects an adjusted operating margin of 6.2% to 6.3%, reflecting consistent performance above 6%. Flex now adjusted EPS of $3.09 to $3.17, raising the midpoint by 17 cents per share.
Flex Ltd. price-consensus-eps-surprise-chart | Flex Ltd. Quote
For Reliability Solutions, revenue is expected to grow in the low- to mid-single digits, supported by strong demand in data center power and medical devices, partially offset by a soft but steady renewables and automotive market. For Agility Solutions, revenue is expected to increase in the mid- to high-single digits, fueled by continued cloud strength, partially offset by softer demand in consumer and lifestyle products and the temporary shutdown of the Mukachevo facility in Ukraine.
Following the earnings announcement, Flex’s shares went up 2.86% in trading and closed the session at $66.10 on Oct. 29, 2025. In the past year, the stock has surged 85.7% compared with the Zacks Electronics - Miscellaneous Products industry’s growth of 28.8%.
The Flex Reliability Solutions Group encompasses Health Solutions, Automotive and Industrial businesses. Revenues grew 3% to $3 billion, accounting for 45% of net sales. This was driven by strong Power growth and steady gains in Health Solutions and Core Industrial, partially offset by ongoing weakness in the automotive sector.
The Flex Agility Solutions Group comprises Communications & Enterprise Compute or CEC and Lifestyle and Consumer Devices businesses. Revenues were up 4% to $3.8 billion, accounting for the remaining 55% of net sales. Strong cloud demand that offset weaker performance in communications and consumer markets drove the upside.
Non-GAAP gross profit came in at $632 million, up from $554 million reported in the year-ago quarter. Non-GAAP gross margin expanded 80 basis points (bps) to 9.3% in the reported quarter.
Non-GAAP operating income came in at $409 million, up from $358 million reported a year ago. Non-GAAP operating margin expanded 55 bps to 6%.
The adjusted operating margins of the Flex Reliability Solutions Group were 6.5%, up 105 bps from the prior-year level. The adjusted operating margins of the Flex Agility Solutions Group declined 5 bps to 6%.
Selling, general & administrative expenses totaled $260 million, up 20.4% year over year.
As of Sept. 26, 2025, cash & cash equivalents and long-term debt (net of current portion) were $2.25 billion and $3 billion, respectively, compared with $2.24 billion and $3 billion as of June 30.
The company generated a second-quarter fiscal 2026 cash flow from operating activities of $453 million and an adjusted free cash flow of $305 million.
In the quarter, the company repurchased $297 million worth of stock.
For the third quarter of fiscal 2026, Flex expects revenues to be between $6.65 billion and $6.95 billion.
Management expects adjusted earnings of 74-80 cents per share. Adjusted operating income is projected to be between $405 million and $435 million.
Flex expects Reliability Solutions revenue to grow mid- to high-single digits, supported by strong power demand and accelerating growth in medical devices.
Agility Solutions revenue is expected to range from slightly down to up low single digits, as continued cloud growth is offset by softer demand in consumer devices and lower expectations in Lifestyle.
Flex currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Fortive Corporation (FTV) reported third-quarter 2025 adjusted EPS of 68 cents from continuing operations, which surpassed the Zacks Consensus Estimate of 58 cents. The bottom line increased 15.3% year over year. Revenues increased 2.3% year over year to $1.03 billion. The top line beat the Zacks Consensus Estimate by 2.1%. Core revenues jumped 1.9%.
Sensata Technologies Holding plc (ST) reported third-quarter 2025 adjusted EPS of 89 cents, flat year over year. However, the bottom line topped the Zacks Consensus Estimate by 4.7%. Revenues for the quarter reached $932 million, down 5.2% from a year ago. The top-line contraction was attributable to earlier announced divestitures and product lifecycle optimization efforts. However, the figure outperformed management’s expectations ($900-$930 million) and beat the consensus estimate by 1.9%.
SAP SE (SAP) reported third-quarter 2025 non-IFRS earnings of €1.59 ($1.86) per share, climbing 29% from the year-ago quarter’s levels. The Zacks Consensus Estimate was pegged at $1.69. Driven by robust cloud growth, disciplined cost control and expanding AI capabilities, SAP reported total revenues on a non-IFRS basis of €9.08 billion ($10.6 billion), representing a 7% year-over-year increase (up 11% at constant currency or cc). The Zacks Consensus Estimate was pegged at $10.56 billion.
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This article originally published on Zacks Investment Research (zacks.com).
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