Sanmina-SCI Shares Surge 8% As Q2 Results Top Estimates, Rosy Outlook

(RTTNews) - Shares of Sanmina-SCI Corp. (SANM) surged eight percent in extended trade on Tuesday after the electronics contract manufacturer reported results for the second quarter that topped analysts' expectations. The company also provided earnings outlook for the third quarter, above Street view.

However, the company reported a profit for the second quarter that edged down from last year, despite sales growth, reflecting lower operating margins amid higher expenses.

"I am pleased with our second quarter results," Chairman and CEO Jure Sola said in a statement.

The San Jose, California-based company reported net income of $20.8 million or $0.24 per share for the second quarter, edging down from $21.2 million or $0.25 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $38.3 million or $0.44 per share, compared to $25.3 million or $0.30 per share in the year-ago quarter.

On average, ten analysts polled by Thomson Reuters expected the company to report earnings of $0.39 per share for the second quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew to $1.48 billion from $1.43 billion in the same quarter last year, and topped nine Wall Street analysts' consensus estimate of $1.45 billion.

As a percentage of sales, operating margin for the quarter contracted 10 basis points to 3.1 percent from last year's 3.2 percent.

Total operating expenses for the quarter increased to $73.67 million from $54.51 million in the prior-year quarter.

Looking ahead to the third quarter, Sanmina-SCI anticipates adjusted earnings in a range of $0.45 to $0.49 per share, on projected revenues between $1.50 billion and $1.60 billion. Street is currently looking for earnings of $0.43 per share, on quarterly revenues of $1.51 billion.

"Our outlook for revenue growth in the second half of the year remains optimistic as new programs ramp and demand improves across a broad set of customers. We continue to invest in technology and business processes which offer a distinct advantage to our customers. As we further diversify our business, we believe our revenue and profitability will continue to improve," Sola added.

SANM closed Tuesday's regular trading session at $18.26, up $0.38 or 2.13% on a volume of 1.08 million shares. The stock gained a further $1.46 or 8.00% in after-hours trading.