Sanmina-SCI Cuts Revenue Forecast On Weak Demand

Sanmina-SCI on Monday cut its quarterly revenue forecast and said earnings would be worse than it had expected because of weak demand in the communications and high-end computing markets.

The contract electronics manufacturer lowered it estimate for revenue for the March quarter to about $2.6 billion, from the previous forecast range of $2.65 billion to $2.75 billion.

It said it was not in a position to give an updated forecast for earnings, but said non-GAAP earnings per share would be below its previous guidance. In January, Sanmina had estimated second-quarter earnings excluding one-time items and stock options expenses at 5 cents to 7 cents a share.

Wall Street analysts were looking for earnings per share before items of 6 cents on revenue of $2.69 billion, according to Reuters Estimates.

"The second quarter has historically been a seasonally weak quarter for us, but we experienced even greater weakness in demand over the last two to three weeks," Chairman and CEO Jure Sola said in a statement. "The majority of this softness was in the communications and high-end computing end-markets, while the rest of the markets delivered to our expectations."

The chief executive said he thought the weakness was short term and the business should improve in the second half.

Sanmina said it expected to report a decrease in inventory of at least $90 million for the second quarter, and an increase in cash and cash equivalent of at least $100 million.

The company, based in San Jose, California, is scheduled to release its second-quarter report on April 24.