Contract electronics manufacturer Sanmina-SCI Corp. (SANM) Wednesday reported a swing to profit in the third quarter as revenues increased 13.8% from last year. Adjusted earnings for the quarter came in above Street expectations. The company provided its earnings and revenue outlook for the fourth quarter.
San Jose, California-based Sanmina-SCI recorded third-quarter GAAP net income of $15.33 million or $0.03 per share compared to a loss of $27.64 million or $0.05 per share in the year-ago quarter. On a non-GAAP basis, net income was $38.18 million or $0.07 per share compared to a loss of $22.81 million or $0.04 per share in the in the same quarter last year.
On average, ten analysts surveyed by First Call/Thomson Financial expected earnings of $0.04 per share for the quarter.
Income from continuing operations was $11.97 million or $0.02 per share compared to a loss of $42.20 million or $0.08 per share in the last-year quarter.
Net sales for the third quarter advanced 13.8% to $1.90 billion from $1.67 billion in the prior-year quarter. Analysts expected the company to report sales of $1.82 billion for the quarter.
Gross profit climbed to $139.64 million from $95.06 million in the year-ago quarter. Third-quarter operating profit was $39.74 million compared to an operating loss of $5.52 million in the third quarter of 2007.
Amongst others in the industry, Jabil Circuit Inc. (JBL) reported a substantial increase in third-quarter profit on a 3% increase in revenue, combined with lower costs and expenses. Another contract electronics manufacturer Flextronics International Ltd. (FLEX) is scheduled to report first-quarter results on Thursday, with analysts expecting the company to earn $0.28 per share on revenue of $8.30 billion.
Jure Sola, Sanmina-SCI Chairman, commented, "With the completion of the sale of our personal computing business and our restructuring initiatives largely behind us, I believe we will be able to sustain our financial improvements despite the challenging economic environment."
On July 3, analysts at RBC Capital Markets upgraded Sanmina-SCI to 'sector perform' from 'underperform' and set the target price at $1.50. In a research note, the analysts indicated that the upgrade was based on valuation, following the recent decline in the company's share price. There are, however, continued concerns surrounding Sanmina-SCI's low capacity utilization, cost structure and unprofitable components business, said the analysts.
For the nine-month period, the company reported a GAAP net loss of $1.17 million compared to a loss of $25.52 million or $0.05 per share in the corresponding period last year. On a non-GAAP basis, the company posted net income of $87.39 million or $0.16 per share for the period, up from $12.63 million or $0.02 per share last year. Year-to-date sales advanced to $5.50 billion from $5.38 billion in the same period a year earlier.
For the fourth quarter, the company expects earnings on a non-GAAP basis from continuing operations to be in the range of $0.05 per share to $0.07 per share. Fourth-quarter revenues are estimated between $1.8 billion and $1.9 billion. Analysts currently anticipate earnings of $0.05 per share on revenues of $1.87 billion for the quarter.
Additionally, the company announced an amendment to its certificate of incorporation, allowing it to affect a reverse split of its outstanding and authorized Common Stock within a range of one-for-three to one-for-ten.
SANM ended Wednesday's trading at 1.37, down 3.52%, on a volume of about 14.08 million shares. During the extended session, the stock gained $0.08 or 5.84%, trading at $1.45. The stock has been moving in a range of $1.05 to 3.22 for the past twelve months, with a three-month average volume of about 6.24 million shares.
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