NEENAH, WI – Contract electronics manufacturer Plexus said fiscal first-quarter profits fell 28.4% year-over-year to $17.9 million.

Revenue was $529.7 million for the quarter ended Dec. 31, down 6.4% compared to the fiscal first quarter of 2011. Both profits and sales were above previous guidance.

For the quarter, networking sales were up 8% and medical was up 2% sequentially, offset in part by drops in industrial (down 14%) and defense (down 7%). Operating margins rose 40 basis points sequentially to 4.5%. Despite continuing end-market volatility, company management said sequential growth and operating margins would continue throughout the current fiscal year.

On a conference call with analysts Wednesday night, Plexus called the current demand environment stable. Networking and Communications remain volatile, due to inventory corrections, but strong growth is forecast in Industrial/Commercial.

The firm expects to close on the purchase of inventory and equipment of Kontron Design Manufacturing Services for $35.2 million next Wednesday. The deal is expected to add $50 million to $75 million in additional 2012 revenue.

The EMS company forecast fiscal second quarter sales of $550 million to $580 million.