Goldman Lowers PT On Sanmina-SCI To $11, COO Hari Pillai To Resign

Goldman Sachs has published a research report on Sanmina-SCI Corporation SANM after the company lowered its March guidance and announced its President and COO's resignation.

In the report, Goldman Sachs writes "Sanmina lowered its March quarter guidance from $1.62-$1.67 bn/$0.40-$0.43 to $1.56-$1.60 bn/$0.28-$0.32 and announced that President and COO Hari Pillai is resigning. Management attributed the miss to weakness in the defense and optical end markets as well as delayed shipments related to a labor strike in India. The magnitude of the EPS miss is significant—28% at the midpoint vs. 4% for sales—owing to mix. Our new GM estimate for the March quarter is 7.55%, down from 7.93% and below the company's initial guidance of 7.9%-8.1%. We are lower our estimates on lower-than-expected sales and gross margin, with FY11/FY12/FY13 estimates (ex-ESO) going to $1.57/$2.04/$2.33 from $1.86/$2.24/$2.53."

Goldman Sachs maintains its Neutral rating but has lowered the price target from $15 to $11.

Sanmina-SCI Corporation closed yesterday at $10.65.