SAN JOSE -- Sanmina-SCI Corp. last night reported first-quarter revenue rose 3.5% to $2.86 billion sequentially but fell 12% year-on-year.

For the quarter ended Dec. 31, the GAAP net income was up 300% to $21.2 million sequentially but fell 13% from a year ago. The company received a one-time income tax adjustment of $64 million.

On a non-GAAP basis, net income was $39.6 million, up 26.4% over the fourth quarter. Operating income was up 29.1% to $76.1 million. Gross profit was $171.1 million, up 11.1% over the fourth quarter of fiscal 2005. Gross margin was 6.0%, up from the prior quarter of 5.6% and up from 5.4% in the first quarter of fiscal 2005.

Inventories increased 12% versus a year ago and increased 11% sequentially. Inventory turns fell to 9.6 turns, down 2.7 turns from last year and 0.7 turns from the October quarter. It was the fifth straight quarter than inventory turns dropped. Days of inventory rose to 38, up three days from the October quarter and nine days from last year.

Communications ($827 million) and enterprise computing and storage ($886 million) continue to be Sanmina-SCI's top market segments. Multimedia segment showed the biggest growth, at 14% sequentially, to $264 million. Sales of medical gear fell the most, down 6% to $164 million.

Return on invested capital rose 70 basis points to 8%.

As of Dec. Sanmina-SCI had $1.04 billion in cash and cash equivalents and short-term investments.

The company guided for second quarter revenue to fall to $2.6 billion to $2.7 billion due to seasonality, about 7.5 to 8% lower than last year's sales.

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