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Sanmina-SCI Shares Drop 5% On Q2 Loss, Weak Outlook

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4/23/2012 10:44 PM ET

Shares of Sanmina-SCI Corp. (SANM: Quote) dropped 5 percent in extended trade on Monday after the electronics contract manufacturer provided earnings and revenue forecast for the third quarter of fiscal 2012, well below Street view.

The company also reported a loss for the second quarter compared to a profit last year on lower margins and sales decline. However, both adjusted earnings per share matched analysts' expectations.

"As we expected, our second quarter continued to be challenged by relatively flat demand across most of our markets and a decline in the multimedia segment," Chairman and CEO Jure Sola said in a statement.

The San Jose, California-based company reported a net loss of $1.44 million or $0.02 per share for the second quarter, compared to net income of $13.07 million or $0.16 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter declined to $22.53 million or $0.27 per share from $24.93 million or $0.30 per share in the year-ago quarter.

On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $0.27 per share for the second quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter declined to $1.46 billion from $1.57 billion in the same quarter last year, and missed nine Wall Street analysts' consensus estimate of $1.51 billion.

As a percentage of revenue, gross margin for the quarter contracted 10 basis points to 7.3 percent from last year's 7.4 percent.

Total operating expenses for the quarter increased to $76.14 million from $72.20 million in the prior-year quarter.

Looking ahead to the third quarter, Sanmina-SCI anticipates adjusted earnings in a range of $0.26 to $0.32 per share, on projected revenues between $1.475 billion and $1.525 billion. Street is currently looking for earnings of $0.37 per share, on quarterly revenues of $1.57 billion.

"Based on our outlook for the third quarter and feedback from our customers, we remain encouraged that we should see improvements in the second half of the calendar year," Sola added.

SANM closed Monday's regular trading session at $10.26, down $0.32 or 3.02% on a volume of 0.67 million shares. The stock lost a further $0.51 or 4.97% in after-hours trading.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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Editors Pick
Apple Inc. said Wednesday after the markets closed that its second quarter profit rose 7% from last year, as sales surged and margins improved amid strong sales of its iPhones. The company's quarterly earnings per share also came in above analysts' expectations as did its quarterly revenue. At the same time, the company gave a slightly downbeat revenue forecast for the current quarter. Stocks moved mostly lower during trading on Wednesday, giving back some ground after trending higher over the past several sessions. Selling pressure was relatively subdued, however, limiting the downside for the markets. The major averages all closed in the red, although the tech-heavy Nasdaq underperformed its counterparts by a wide margin. Russian Foreign Minister Sergei Lavrov warned Wednesday that Moscow would retaliate strongly if its "interests" in Ukraine are attacked. He also criticized the Ukrainian administration for relaunching its so-called anti-terrorist operation in the east of the country a day earlier. Lavrov's remarks came in an interview with Russia Today, which published excerpts of the English-language interview to
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