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Sanmina's Margins Rise Even as Sales Fall

Published: 23 July 2009
 by Mike Buetow
SAN JOSE -- Sanmina-SCI reported third-quarter revenue fell 37% year-over-year to $1.21 billion.

For the period ended June 27, the net loss fell to $41.1 million, from a net income of $15.3 million a year ago.
 
The non-GAAP gross profit was $77.1 million, or 6.4% of revenue, compared to gross profit of $70.6 million, or 5.9% of revenue, sequentially. Non-GAAP operating income was $17.1 million, or 1.4% of revenue, for the quarter compared to $11.4 million, or 1% of revenue in the prior quarter.
 
For the quarter, gross margins rose 60 basis points sequentially.
 
On a conference call with analysts, Sanmina-SCI said demand appears to have stabilized and its customers' outlook has improved. Company executives noted the enterprise computing and industrial segments were strong during the period on new deal wins and higher orders.

The component business, which includes printed circuit boards, backplanes, mechanical systems and enclosures, had a positive book-to-bill. In the third quarter, it was 1.22, due to new business wins during the quarter.

Sanmina-SCI said market communications, which made up 44% of its third-quarter revenue, was flat, medical  (14% of revenue) was down 4%, enterprise computing (15%) was up 4%; industrial, automotive, defense and aerospace (13%) was up 11%; and multimedia products (14%) was flat.

Sanmina guided for fourth-quarter revenues of $1.2 billion to $1.3 billion
 
The company also announced its board has approved a six-for-one reverse stock split, scheduled to take effect Aug. 14. Company shareholders had previously voted to accept the reverse split.

 

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