SAN JOSE -- Sanmina-SCI Corp. today reported a stunning net loss of $1.04 billion for its second fiscal quarter ended April 2.

The EMS maker, the third largest in the world, said revenues rose 1% to $2.89 billion, at the low end of previous guidance, while non-GAAP net income was up 9% to $29.3 million. However, it was sunk by one-time charges of $600 million for impairment of goodwill. It was the 18th straight quarter of one-time charges for Sanmina-SCI.

The GAAP operating loss for the second quarter was $604.1 million.

Cash flow from operations was $122 million and inventory turns were 11.4, down 0.9 turns, the company said.

In a statement, the company said restructuring activities are proceeding as planned. Jure Sola, chairman and chief executive, said, "[O]ur success in doing so has negative accounting consequences associated with certain non-cash assets that relate to our high-cost regions, primarily in the United States. Notwithstanding these write-downs we have had to absorb this quarter, we believe our restructuring activities will enhance our competitiveness in the market and yield positive returns for our shareholders."

At April 2, 2005, the company reported an 11% sequiential increase to $1.2 billion in cash and short-term investments.

Sales from personal and business computing systems group were soft. Revenues from EMS and components operations were comparable with the prior quarter. "We believe this achievement reflects the improving fundamentals of our high-end technology markets," Sola said.

PC sales were down 27% sequentially, and analysts believe sales to IBM and HP, both major customers, slipped late in the quarter. According to Deutsche Bank, communications infrastructure and high-end computing dropped in the mid to high single digits sequentially.

Sanmina-SCI guided for July quarter sales of $2.8 billion to $3 billion and non-GAAP diluted earnings per share to be between $0.05 and $0.07.

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