Sanmina Sees Profits But Outlook On Sales Is Disappointing

Sanmina-SCI Corporation SANM reported 4Q results for September above the mid-point for guidance estimates on sales, according to Citigroup, which published a research report on the company forecasting disappointing sales outlook. In the report, Citigroup writes "SANM 4Q10 (September) results of $1.69B/$0.46 EPS (ex-items), above the mid-point of guidance for sales of $1.65-$1.70B & significantly above EPS guidance of $0.35-$0.41 & street expectations of $0.38 but we note reported EPS was boosted by $0.03 from lower taxes. SANM reported 4Q'10 gross profit margin of 7.8% at the low end of their guided range of 7.8-8.2% but in-line operating profit margin of 4.1% vs. their guided range of 3.9-4.2%. December revenue outlook of $1.625-$1.675 (down -1% to down -4% q/q) is below consensus expectations of $1.71B & the mid-point of EPS guidance of $0.40-$0.44 is slightly below street estimates of $0.43. GM & OPM to increase in Dec." Citigroup maintains its Hold rating and has lowered the price target from $19.50 to $17. Sanmina-SCI Corporation closed yesterday at $12.98.