Solectron beats 4Q estimates by 1 cent

Solectron (NYSE: SLR) topped analyst forecasts by a penny in the fourth quarter and predicted fiscal 2001 results would be at or slightly above current estimates.

After market close Monday, the contract electronics manufacturer posted fiscal fourth quarter earnings of $171 million, or 27 cents per share. First Call's survey of 23 analysts predicted a profit of 26 cents per share for the quarter ended Aug. 25.

The company now sees fiscal first quarter earnings ranging between 27 and 28 cents per share, on sales of $4.8 billion to $5.1 billion. Solectron expects fiscal 2001 earnings of $1.12 to $1.15 per share, with revenue of more than $20 billion. First Call currently forecasts earnings of 27 cents per share for Solectron's November quarter, and $1.14 per share for the full fiscal 2001.

However, company executives said they were being careful with their earnings guidance for Wall Street.

"It's our choice to be conservative at this moment, we'll be talking you up as we go along," CFO Susan Wang told analysts during a Monday afternoon conference call.

Shares of Solectron traded at 46.5 in afterhours activity on the Island electronic communications network, immediately following the release of quarterly results. Solectron stock closed Monday's regular trading at 47, down 1.5 for the session amid a generally negative day for tech-related issues.

Fourth quarter revenue for Solectron increased to $4.7 billion, a 75 percent gain from $2.7 billion in the same period a year earlier, with networking equipment generating 28 percent of total sales.

Telecom produced 20 percent of Solectron's revenue, up from 13 percent in the third quarter. Contract manufacturers have generally been predicting higher communications-related revenues this year.

Gross margin improved to 8.7 percent from 8.4 percent in the third quarter.

Manufacturing and operations saw double-digit percentage gains in all parts of the world, including a 41 percent increase for Asia/Pacific from the third quarter.

For the full fiscal 2000 excluding acquisition-related charges and other one-time items, Solectron earned 85 cents per share, on revenue of $14.1 billion.

Solectron remained cautious about the market for parts, which have been in tight supply for much of this year. While some commodities have become more available, others continue to be in short supply," said Koichi Nishimura, president and CEO. "We expect the industry to experience some degree of supply-demand imbalance into the second half of calendar 2001.">