Sanmina-SCI Swings to 1Q Profit, Topping Views; Shares Soar

   DOW JONES NEWSWIRES 
 

Sanmina-SCI Corp. (SANM) swung to a fiscal first-quarter profit as earnings smashed analysts' expectations amid strong margin gains.

The forecast for the current quarter was also strong, with Chairman and Chief Executive Jure Sola saying Sanmina expects 2010 to be a year of growth. Shares jumped 14% to $14 in after-hours trading.

Sanmina, which makes electronics products for brand-name companies, expects second-quarter earnings, excluding items, of 22 cents to 27 cents a share on revenue between $1.45 billion and $1.55 billion. Analysts had been expecting earnings of 9 cents on revenue of $1.36 billion, according to a survey of analysts by Thomson Reuters.

Sanmina had been reporting a string of losses as weakened demand dented sales. It responded by focusing on cost reduction, inventory management and other efforts to increase profit margins.

For the quarter ended Dec. 31, Sanmina posted a profit of $59.4 million, or 74 cents a share, compared with a year-earlier loss of $25.7 million, or 29 cents a share. Excluding items, including a $36 million legal settlement in the latest quarter, profit was 23 cents compared with a prior-year loss of 1 cent.

Revenue rose 4.2% to $1.48 billion.

Analysts polled by Thomson Reuters expected earnings of 13 cents on revenue of $1.4 billion.

Gross margin rose to 7.4% from 5.9%.

The company also said it redeemed $176 million in debt that was scheduled to mature in June, though its cash and cash equivalent balance was down to $727 million from $899 million in the previous quarter.

-By Yogita Patel and David Benoit, Dow Jones Newswires; 212-416-2458; [e-mail]