Sanmina-SCI posts 1st-qtr profit, reversing year-ago loss, on big legal settlement, sales gain

Sanmina-SCI posts 1Q profit on settlement, sales

SAN JOSE, Calif. — Electronics contract manufacturer Sanmina-SCI Corp. on Tuesday posted a strong fiscal first-quarter profit, reversing a year ago loss, as sales rose, expenses were cut and the company recorded a big gain from a legal settlement.

The results handily topped Wall Street expectations, and shares jumped in late trading.

Net income in the three months ended Jan. 2 was $59.4 million, or 74 cents per share, after a net loss of $25.7 million, or 29 cents per share, for the corresponding period a year ago.

The results included a $35.6 million gain from a litigation settlement. The company did not offer details on the settlement when contacted by The Associated Press.

Adjusted to exclude the settlement, along with stock-based compensation, restructuring and integration costs, impairment charges and other items, profit was $18 million, or 23 cents per share, compared with an adjusted loss of $768,000, or a penny per share, in the year-ago period.

There were 8 percent fewer shares outstanding in the most recent quarter, which would have the effect of raising per-share results.

Revenue for the first quarter was $1.48 billion, up 4 percent from $1.42 billion last year.

Analysts surveyed by Thomson Reuters, on average, expected profit of 13 cents per share, on revenue of $1.4 billion. Analysts typically exclude one-time gains and charges in their estimates.

Sanmina-SCI cut its operating expenses for the quarter by 14 percent, to $70 million from $81.9 million.

“These results reflect our strong operational execution and an increase in demand which we expect to continue into the second quarter,” said Chairman and CEO Jure Sola in a statement.

For the second quarter, Sanmina-SCI forecast adjusted profit between 22 cents and 27 cents per share, on revenue between $1.45 billion and $1.55 billion.

Analysts, on average, are expecting adjusted profit of 9 cents per share, with estimates ranging from a loss of 4 cents per share to a profit of 16 cents. The average revenue projection from Wall Street is $1.36 billion, with estimates ranging from $1.28 billion to $1.45 billion.

In aftermarket electronic trading, Sanmina-SCI shares gained $1.69, or 12.9 percent, to $13.89. The stock closed Tuesday’s regular trading at $12.30, up 5.6 percent, and hit a 52-week high of $12.45 during the session.