Sanmina Profit Down, Q2 Outlook Weak; Shares Fall 6%

(RTTNews) - Sanmina Corp. (SANM) Monday reported a drop in profit for the first quarter despite growth in revenues, as the electronics contract manufacturer's bottom line was weighed down by one-time items.

Earnings for the quarter came in ahead of analysts' estimates, but revenues fell short of expectations. Moving ahead, the company detailed a weak outlook for the second quarter, sending its shares down 6 percent in the after-hours trade.

San Jose, California-based Sanmina's first-quarter profit dropped to $22.7 million or $0.26 per share from $23.1 million or $0.26 per share a year ago.

Results for the quarter included loss on repurchase of debt of $2.9 million and deferred and non-recurring tax adjustments of $13.0 million last year.

Excluding special items, adjusted earnings for the first quarter rose to $53.1 million or $0.61 per share from $35.5 million or $0.41 per share last year. On average, 8 analysts polled by Thomson Reuters expected earnings of $0.58 per share for the first quarter. Analyst' estimates typically exclude special items.

Sanmina's first-quarter revenues rose to $1.67 billion from $1.45 billion a year ago. Analysts had a consensus revenue estimate of $1.68 billion for the first quarter.

"Revenue for the first quarter was in line with our expectations and up 15 percent year over year. We executed well and delivered solid operating margin in spite of a challenging mix of business," said CEO Jure Sola.

Looking forward to the second quarter, the company expects adjusted earnings of $0.50 to $0.55 per share on revenues of $1.575 billion to $1.625 billion. Analysts currently expect earnings of $0.53 per share on revenue of $1.61 billion for the quarter.

"Our outlook for the second quarter is slightly down sequentially primarily due to seasonality, and we believe demand will improve in the second half of the year. We remain optimistic in our ability to drive profitable growth in fiscal 2015," said Sola.

The company's board has also approved the buyback of up to 20 million shares.

SANM closed Monday's trading at $23.36, up $0.32 or 1.39%, on the Nasdaq. The stock dropped $1.44 or 6.16%, in the after-hours trade.