SAN JOSE -- EMS giant Sanmina-SCI's problems continued in the September quarter as earnings fell by $20 million on a 1.8% drop in revenue, to $2.71 billion. The company reported a net loss of $28.1 million, down from a loss of $8 million a year ago.

For fiscal 2006, revenues decreased 6.6% to $11 billion on weakness in its computing businesses, for which sales to existing customers fell $772 million. Other decreases included a $262 million drop in enclosures sales and a $186 million fall in storage systems. The net loss fell to $141.6 million, from a loss of $1.03 billion in fiscal 2005.
The company also restated its financials for several quarters.

For the quarter, gross margins fell to 4.7% from 5.5% a year ago. As of  Sept. 30, backlogs were $1.5 billion, down $300 million.

On a sequential basis for the three months ended Sept. 30, days sales outstanding fell two days to 51; inventory turns dropped 0.2 to 7.9 turns; accounts payable fell three days to 53; and cash cycle days rose two to 44.

For fiscal 2006, the three largest customers were IBM, Lenovo and HP, accounting for 12.8%, 10.5% and 10.0% of sales, respectively. In fiscal 2005, only IBM, at 23.2%, accounted for greater than 10% of net sales. Last year, IBM sold its PC unit to Lenovo.

The company has 13.5 million sq. ft. of facility space worldwide. It has closed or is in the process of closing an additional 1.62 million sq. ft. in the U.S. and 1.37 million sq. ft. internationally.