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Sanmina-SCI (SANM) Drops After Guiding Q3 Below Street

 April 23, 2012 04:43 PM

(By Balaseshan S) Sanmina-SCI Corp. (NASDAQ:SANM), an integrated manufacturing services company, reported a second quarter loss due to anticipated challenge of relatively flat demand across most of its markets and a decline in the multimedia segment. Further, the company guided third quarter below Street's view, sending its shares down 4.97% in aftermarket.

Loss for the second quarter was $1.44 million or $0.02 per share, compared to a profit of $13.07 million or $0.16 per share last year. Adjusted profit declined to $22.53 million or $0.27 per share from $24.93 million or $0.30 per share.

Sales fell to $1.46 billion from $1.57 billion. Analysts had expected a profit of $0.27 per share on revenue of $1.51 billion.

[Related -Sanmina-SCI Corp. (SANM): Short-Term Technical Strength And Longer-Term Value]

Gross margin declined to 7.3% from 7.4% while operating margin fell to 2.1% from 2.8%. On adjusted basis, gross margin decreased to 7.4% from 7.5% while operating margin fell to 3.1% from 3.4%.

Chief Executive Jure Sola said as expected, the company's second quarter continued to be challenged by relatively flat demand across most of its markets and a decline in the multimedia segment.

Looking ahead into the third quarter, the company expects adjusted earnings of $0.26 to $0.32 per share and revenue of $1.475 billion to $1.525 billion, while Street predicts profit of $0.37 per share on revenue of $1.57 billion.

Net interest expense savings is expected to be about $20 million on an annual basis. Based on its third quarter outlook and feedback from its customers, the company remains encouraged that it should see improvements in the second half of the calendar year.

[Related -Another Negative Day For The Market]

SANM closed Monday's regular trading down 3.02% at $10.26. The stock has been trading between $6.01 and $12.55 for the past 52 weeks.



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