SAN JOSE - Sanmina-SCI on Thursday reported first-quarter revenues rose 9.5% to $3.25 billion, at the low end of previous company guidance, and the EMS firm announced yet another series of factory closures.
For the period ended Jan. 1, the company reported GAAP net income of $24.4 million, up 54.5% over last year. Operating income was up 29% to $59.6 million.
Sanmina-SCI said it will further reduce manufacturing capacity in high-cost regions and will take an additional $75 million restructuring charge on top of charges of $100 million announced last July. This was the 16th straight quarter Sanmina took charges for restructuring.
In a press release, chairman and chief executive Jure Sola said, "Revenues for the quarter were at the low end of our expectations as our customer end-markets experienced competitive pricing pressures and a sluggish business climate."
The company had record inventory turns of 12.3.
The firm guided for second-quarter revenue of $2.85 billion to $3.15 billion
TORONTO -- Celestica, the world's third largest EMS company, reported a GAAP net loss of $810 million, primarily due to non-cash writedowns for asset impairment and a $161 million charge to cover a potential default by a leading customer. The company said it would close plants in higher-cost regions to improve capacity utilization.
The results marred an improvement in sales. Fourth-quarter revenue was $2.3 billion, up 22% year-on-year and 7% sequentially.
For the same period last year, the company reported a loss of $8 million.
Overall, the company took one-time charges of $836 million. Celestica recorded restructuring charges of $45 million for previously announced actions.
NEENAH, WI -- Plexus Corp. today reported record revenues of $287.5 million for the quarter ended Jan. 1, up 21% over last year.
The company, which provides EMS services, reported net income of $3 million, including $900,000 in restructuring and impairment costs.
The company guided for revenues between $280 million and $290 million in the second quarter. Anticipated capital spending will be $25 million to 28 million for the year.
"Based on current end-market demand and the strength of our new business pipeline," president and chief executive Dean Foate said, "we are increasingly confident about achieving the high-end of our 15% to 18% revenue growth target for the full year."
Foate said profits were affected by theft and failure to comply with inventory control of "high-value parts" in its Mexico facility.
On a conference call Wednesday morning, the company said it while it is ramping engineering capability in Malaysia, it has "no active plans" to further consolidate other North American facilities."Our ability to provide close to home project management while leveraging lower cost (manufacturing) in Asia is turning out better for our customers," the company said.
By industry, wireline and networking made up 39% of sales, wireless infrastructure 11%, medical 31%, industrial and commercial 14%, and defense 5%.
The firm's top 10 customers comprised 60% of sales during the quarter, up from 55% sequentially. Juniper Networks (20% of sales) and GE (11%) were the two largest customers.
Inventory increased sequentially by $25.3 million, to $198.8 million, while annualized inventory turns decreased to 5.3 turns this quarter from 5.8.
Reuters reported today that the Kurdistan Workers Party (PKK) set fire Monday to a Beko Elektronik warehouse in Beylikduzu, outside Istanbul,.
According to a ranking Beko official, damage from the fire was more than $5 million and between 30,000 and 35,000 products were lost -- around half of them television sets.
Beko is a subsidiary of industrial group Koc Holding. Last year the company made more than six million TVs, making it one of the top producers in Europe, Reuters said.
The PKK has engaged in armed battles for an ethnic homeland since 1984.
U.S. federal agencies are reviewing the case on grounds of national security. At issue is Lenovo's announced plans to send Chinese computer experts and researchers to IBM's North Carolina facility, said Enterprise Security Today.
That announcement is creating some consternation at high levels in the U.S. government. Some members of the Committee on Foreign Investments in the United States are questioning whether the relocation would open the U.S. to potential acts of industrial espionage.
The CFIUS' role is to review corporate deals that involve
foreign firms to determine whether any national security threats may
arise. The
CFIUS includes the Defense Department, the U.S. Trade Representative's
office and the Commerce Department.
One analyst said concerns over the possible breach in security are warranted.
Laura DiDio, an analyst with Yankee Group, was quoted as saying, "China is a still a Communist nation. ... They're very closed,
despite these deals, and they sell stuff to people we consider enemies.
So there's a real fear here, and it's not unwarranted."
WEST CHICAGO -- The outlook for sales of connectors remains unchanged: growth of 6 to 8%, according to a leading industry research firm.
However, Bishop & Associates says peak demand in the first half of 2004 raises the bar for those numbers to be reached.
Sales growth in 2005 "will require good demand foer electronics products.... Frankly we are a little concerned," the company said in a recent report.
Order growth has slowed, having declined in October and November. The November book-to-bill -- the most recent month for which data are available, was 1.0, below the year-to-date average of 1.02.
"We envision a scenario in which the first half of 2005 will be flat to the first half of 2004," Bishop said. "If 2005 starts slowly, we believe full year growth in 2005 will be difficult to achieve."
Through November, orders were up 22.2% for the year. November orders slipped 2% sequentially.
Shipments were up 22.9%, the 25th straight month of year-on-year gains.
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