SAN FRANCISCO -- A leading analyst today maintained its cautious outlook for providers of electronics manufacturing services.

Deutsche Bank said recent reports from major OEMs that outsource manufacturing indicate tepid and in some cases negative growth ahead for EMS firms. 

In hardware sales, IBM, a leading outsourcer, reported a 1% year-on-year increase in the fourth quarter due to slowness in its mainframes, storage and PC businesses, down from 9% sequentially. Motorola and Juniper fell on a year-on-year basis. 

Handset shipments improved as Motorola and SonyEricsson beat quarterly forecasts, although the average selling prices were lower than expectations, DB said.

Communications infrastructure products met or beat forecasts at Motorola and Juniper, but sales are slowing on year-on-year. 

"As end market growth continues slowing into 2005, look for EMS industry fundamentals to soften," wrote analyst Chris Whitmore. 

EMS firms that could be affected include Celestica, which derives an estimated 10% of its sales from IBM's mainframes and storage, and Sanmina-SCI, which gets 30% of its sales from IBM's PCs and X-series servers, DB said. Meanwhile, Motorola makes up 4 to 5% and Sony Ericsson 13% of Flextronics' revenues. And Motorola outsources wireless infrastructure gear to Solectron, Flextronics and Plexus. Also, Plexus gets 15% of its sales from Juniper.