logo
Plus   Neg
Share
Email

Sanmina Shares Tank 12% On Weak Outlook

Shares of Sanmina Corp. (SANM) tanked 12% on Monday after the electronics manufacturing company's issued a weak outlook for the first quarter. The company also announced plans to "right size" the company due to soft demand in the first half of next year.

San Jose, California-based Sanmina's fourth-quarter surged to $19.76 million or $0.27 per share from $0.78 million or $0.01 per share last year.

Adjusted earnings for the quarter were $60.61 million or $0.84 per share for the three-month period. Analysts polled by Thomson Reuters estimated earnings of $0.77 per share for the quarter.

The company's revenue for the quarter rose 0.5% to $1.89 billion from $1.88 billion last year.

Looking forward to the second quarter, Sanmina expects adjusted earnings of $0.65 to $0.75 per share and revenues of $1.725 billion to $1.825 billion. Analysts currently estimate earnings of $0.87 per share and revenues of $2.18 billion for the quarter.

"We expect demand to be soft in the first half of the fiscal year as a result of excess inventory in the channel, slower than anticipated 5G deployment and global economic uncertainty. As a result, we have initiated a plan to right size the organization to further improve operational efficiencies and optimize our cost structure. This right-sizing, coupled with our focus on the quality of our revenue, will support our ongoing operating margin, non-GAAP earnings per share and cash generation objectives," said CEO Hartmut Liebel.

The company said it has adopted a company-wide right-sizing plan, under which it expects to incur restructuring charges of about $10 million to $20 million, consisting primarily of cash severance costs.

SANM closed Monday's trading at $31.80, up $0.33 or 1.03%, on the Nasdaq. The stock, however, dropped $3.69 or 11.62% in the after-hours trade.

For comments and feedback contact: editorial@rttnews.com

Business News

Editors Pick
Billionaire Warren Buffett's Berkshire Hathaway reported a profit for the second-quarter that increased 87 percent from last year, as the value of its investment portfolio increased with the stock market. But it took about $10 billion write down on the value of its Precision Castparts aircraft parts unit due to the impact of the COVID-19 pandemic. Operating profit declined 10 percent. Twitter has had preliminary talks with TikTok's Chinese owner ByteDance to buy the U.S. operations of the video-sharing app, the Wall Street Journal reported citing people familiar with the matter. Meanwhile, Microsoft has been the only company so far to say publicly it is pursuing TikTok. Pfizer said Friday it reached a multi-year deal with Gilead Sciences to manufacture and supply Gilead's investigational antiviral remdesivir for COVID-19 patients.
RELATED NEWS
Follow RTT