ST. LOUIS -- Viasystems Group today reported higher fourth-quarter EMS sales on higher demand for automotive products, partially offset by softness in telecommunications.

For the period ended Dec. 31, the company's electronics assembly segment sales rose 53% year-over-year to $47.2 million. Operating income rose $1.9 million to $2.1 million. Sequentially, EMS sales fell 6.3% and operating income was down 4.5% on lower demand for telecommunications.

Overall, the printed circuit board and contract electronics assembler said net sales were $243.9 million, up 20.3% year-over-year organically and down 6% sequentially. Sales were up 85.7% year-over-year, including revenue from the company's acquisition of Merix. Operating income was $19.6 million. The book-to-bill ratio in the quarter was 1.09. Net income swung to a profit of $9.5 million, from a loss of $15.9 million last year.

"Our results in the final quarter of 2010 reflect sustained strength of demand for our products," said chief executive David M. Sindelar. "Orders placed on our 10 factories during the fourth quarter matched our record high bookings in the immediately preceding quarter and were about 10% ahead of the same period last year. while demand for telecommunications end-use products remained a bit softer than I would like to see.

"Sales from the same ten factories in the fourth quarter of 2010 increased by approximately 20% year over year," said Sindelar, "despite temporary reductions of our available productive capacities, which contributed to the 6% sequential quarterly decline in our sales. We also experienced an unexpected reduction of our printed circuit boards segment capacity during the fourth quarter while we assisted a customer with an investigation of an intermittent quality problem discovered in one of their end-products."

He said the company expects increased copper and other material costs and higher Chinese labor costs in the first quarter. The company also has to rebuild a printed circuit board plating line ahead of its normal cycle, limiting total capacity during the quarter.

Fourth-quarter sales in the company's PCB segment were $196.7 million, down from $208.9 million, and operating income was $17.5 million, down from $23.6 million, respectively, sequentially. Last year, Viasystems reported operating income of $4.2 million on sales of $100.6 million. Sequentially, revenues increased only in the military and aerospace markets.

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