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Sanmina tops 4Q estimates, sees 50 pct growth in 2000

    Sanmina (Nasdaq: SANM) topped First Call expectations by a penny in the fourth quarter.

    After market close Monday, the contract electronics manufacturer reported fiscal fourth quarter earnings of 55 cents per share. First Call's survey of 15 analysts predicted a profit of 54 cents per share for the quarter ended Oct. 2.

    Fourth quarter revenue rose to $348.6 million, an increase of a third from $262.6 million in the year ago period, when Sanmina earned $22 million, or 40 cents per share. Like many contract electronics companies, Sanmina has seen more revenue from offering a wider range of manufacturing services beyond circuit boards, particularly for the telecom equipment industry.

    "Our record performance reflects both strength in the market place as well as the accelerating trend in outsourcing, especially among leading telecommunications companies," said Jure Sola, chairman and CEO. "This year the EMS industry continued to show robust growth, and we saw several leading telecommunication OEMs divest their in-house manufacturing operations and select Sanmina as a key outsourcing partner. We expect this trend to continue and plan to capitalize on selected acquisition opportunities to expand our EMS service capabilities."

    Sola predicted fiscal 2000 would see his company increase revenues by more than 50 percent -- more than twice the expected industry growth rate of 20 percent -- with IP switches, wireless infrastructure equipment and networking hardware providing much of Sanmina's boost.

    Operating margin rose to 14.8 percent in the fourth quarter from 13.3 percent a year earlier. Sanmina credited higher volume, improved efficiency and tight cost controls for boosting margins.

    For the full fiscal 1999, Sanmina's revenue increased 22 percent to $1.2 billion. Excluding one-time charges, Sanmina earned $121.9 million, or $1.98 per share for the year.

    Shares of Sanmina fell 3/4 to 82 1/4 in Monday's regular trading prior to the earnings report. Among 16 Wall Street firms surveyed by Zack's Investment Research, nine recommend Sanmina as a "strong buy", five have the equivalent of "moderate buy" ratings, and two maintain "hold" advisories on the stock.>