MILPITAS, CA -- Solectron Corp., the world's fourth largest provider of electronics manufacturing services, reported a third-quarter loss of $64.1 million on sales of $2.6 billion.

For the quarter ended May 31, revenue dropped 14%. Last year the company reported net income of $21.4 million on revenues of $3.03 billion.

Solectron guided for fourth-quarter revenue of $2.4 billion to $2.6 billion.

In a research note Friday, Chris Whitmore of Deutsche Bank wrote, "Solectron continues to struggle in the competitive EMS industry, as
evidenced by the company's substantial share loss." DB forecasts that August quarter sales will drop 19% year-over-year, versus an average industry gain of 10%.  

On a conference call last night, Solectron said revenue was stronger in computing, storage, communications, industrial and automotive and weaker in networking and consumer markets.

During the quarter, sales to Cisco fell 23% sequentially, while sales of 3G handsets to NEC were off, too, Whitmore wrote, while sales of high-end servers and wireless infrastructure were "relatively strong."  

For the quarter, the firm generated $225 millioln in cash from operations (excluding charges). Cash conversion cycle fell by three days. Return on invested capital was 3.5%.