Solectron hurdles 1Q estimates, confirms fiscal targets

Solectron topped analysts’ estimates in its first quarter Monday, raking in $190.6 million, or 31 cents a share, on sales of $5.7 billion.

First Call Corp. consensus expected the contract electronics manufacturer to earn 28 cents a share in the quarter.

Ahead of the earnings report, Solectron (NYSE: SLR) shares finished off $1.32 to $26.72.

The $5.7 billion in sales marks a 101 percent improvement from the year-ago quarter when it earned $109.8 million, or 19 cents a share, on sales of $2.8 billion.

“We generated a strong quarter from both an operational viewpoint and a strategic perspective,” said CEO Koichi Nishimura in a prepared release. “Our ongoing businesses delivered solid sales and earnings growth, exceeding analyst estimates and reflecting a continued increase in customer demand for our services.”

Including a variety of one-time charges, Solectron posted diluted earnings of 29 cents a share, up from 17 cents a share in the year-ago quarter.

In the quarter, Solectron achieved gross profit margins of 8.5 percent, down from 8.7 percent in the fourth quarter.

Looking ahead, Solectron officials said the company expects to post sales of between $5.4 billion to $5.7 billion in the second quarter.

Networking sales represented 29 percent of its total sales this quarter with telecommunications equipment and mobile and wireless accounting for 22 percent and 12 percent, respectively.

For the fiscal year, it sees sales in excess of $23 billion and earnings of between $1.22 to $1.25 a share.

First Call Corp. consensus expects Solectron to earn $1.15 a share in the fiscal year.

Last quarter, Solectron posted a profit of 27 cents a share on sales of $4.7 billion.

The stock moved as high as $52.63 in October before falling to a low of $26.06 earlier this month.

Twenty-six of the 27 analysts tracking the stock maintain either a “buy” or “strong buy” recommendation.