Analysts pump Sanmina to 52-week high
The supplier of electronics to telecom companies and others gets a round of applause from analysts as it reports fiscal fourth-quarter net income that more than doubles.
Sanmina stock also hit a new 52-week high on Tuesday morning, soaring to $121 per share before dipping in midday trading and ending the day at $113.81. That's 1.57 percent below Monday's closing price but a 127.91 percent boost since the beginning of the calendar year.
San Jose, Calif.-based Sanmina, which makes printed circuit boards and other electronics for Cisco Systems, Nortel Networks and other clients, reported Monday that net income for the quarter was $92.2 million, or 56 cents a share. That's a 107.66 percent gain from the same period last year, when net income was $44.4 million, or 30 cents per share.
Sales soared 91 percent to $1.27 billion, compared with $664.3 million in the same period a year ago. Operating margins rose to 12.1 percent from 11.3 percent in the fiscal fourth quarter last year.
Sanmina reported a profit of $97.1 million, or 59 cents per share. Analysts polled by First Call/Thomson Financial expected the company to earn 49 cents per share. Those figures do not include a charge of $3 million, or 3 cents per share, related to the early retirement of $188 million of debt from its purchase of rival Hadco.
Company executives and analysts credited a severe dearth of electronics components for Sanmina's spectacular quarter. Sanmina president Randy Furr said in a conference call Monday that the company could have earned $25 million to $75 million more during the quarter if it had been able to get all the components it needed.
Based on scorching demand for Sanmina products, Goldman Sachs upgraded Sanmina Tuesday from "market perform" to "market outperform." First Union Securities and Deutsche Banc reiterated "buy" ratings, while Needham, Chase Hambrecht & Quist and Credit Suisse First Boston reiterated "strong buy" ratings.
Analyst Paul G Fox at Banc of America Securities maintained his ''strong buy'' rating and his 12-month target price of $170 per share. He boosted his fiscal year 2001 and fiscal year 2002 earnings-per-share estimates to $2.75 and $3.55 from $2.31 and $3.03 per share, respectively.
Robertson Stephens electronic manufacturing products analyst J. Keith Dunne maintained his "buy" rating but sharply raised his cash earnings-per-share estimates to $2.85 from $2.45 in fiscal 2001. Sanmina reported fourth-quarter cash earnings per share of 62 cents, up 92 percent from last year.
"Sanmina is trading for 37 times our calendar 2001 earnings per share, a modest discount to its peers and its growth rate, which may still be conservative if the company is able to further leverage its strong balance sheet to make additional accretive acquisitions," Dunne wrote in a research note Tuesday morning.
Analyst Louis Miscioscia at Lehman Brothers maintained his ''outperform'' rating but boosted his 12-month price target to $150 per share from $120 per share. He also revved up his fiscal year 2001 and fiscal year 2002 earnings per share estimates to $2.70 and $3.00 from $2.25 and $2.38, respectively.
In a research note this morning, Miscioscia praised Sanmina's fiscal fourth quarter as a "blowout," and he pumped investors by telling them that he's "looking for more of the same in fiscal year 2001."