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| Tuesday, July 18, 2006 |
Sanmina-SCI Shares Slide on 3rd-Quarter Warning, Bearish Analyst Notes
NEW YORK -- Shares of electronics manufacturing services provider Sanmina-SCI Corp. got slammed in afternoon trading on Tuesday after the company cut its third-quarter outlook and several analysts published bearish comments on the company.
On Monday the San Jose, Calif.-based company said that due to a less profitable mix in sales, it expected its third-quarter earnings to range from 6 cents to 7 cents per share, down from a previous forecast for earnings of 8 cents to 10 cents per share. Both estimates excluded certain expenses.
Jefferies & Co. analyst Brian White, who has a "Hold" rating on the stock, said he believes the company will continue to be challenged in 2006 "especially in light of market share shifts, a slowing economic environment and disappointing operating leverage," White wrote in a published note to clients.
Merrill Lynch analyst Steven Fox, who has a "Neutral" rating on the stock, said the miss was not a big one, but an emblematic one.
"The details around the miss are emblematic of why we have resisted the Sanmina 'leverage story' in the past couple of years as real leverage proves elusive for a variety of familiar reasons (restructuring, components, and sales and operating execution," Fox wrote in a note.
Fox cut his 2006 earnings estimate to 26 cents per share, down from 31 cents per share, while analysts polled by Thomson Financial currently expect the company to report, on average, earnings of 33 cents per share.
Shares of Sanmina, which have traded between $3.45 and $6.02 over the last year, were down 53 cents, or 12.4 percent, at $3.74 in afternoon trading on the Nasdaq. |
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