What: Shares of Sanmina (NASDAQ:SANM) jumped as much as 22% higher on Tuesday morning. The provider of electronics manufacturing components and services reported fourth-quarter results on Monday night, and low expectations had primed the stock for a decent bounce.
So what: Sanmina's fourth-quarter sales fell 3% year over year, landing at $1.64 billion. Operating profits declined 14% to $69 million, but a large tax benefit led to GAAP earnings of $3.78 per diluted share -- more than double the year-ago figure.
On adjusted terms, backing out one-time items such as that huge tax windfall, Sanmina's non-GAAP earnings fell from $0.61 to $0.57 per diluted share.
Analysts would have settled for adjusted earnings of $0.55 per share on $1.60 billion in top-line sales. Sanmina exceeded both of these oft-cited targets.
Now what: Looking ahead, the company formerly known as Sanmina-SCI expects first-quarter sales of roughly $1.58 billion and adjusted earnings near $0.58 per diluted share. That earnings target is ahead of current analyst projections, making this a classic beat-and-raise performance.
The report had a cascading effect on the electronics manufacturing sector. Archrival Celestica (NYSE:CLS) saw its shares edging nearly 3% higher on no news of its own. Jabil Circuit (NYSE:JBL) shares gained more than 5%, again on nothing but third-party news. Both rivals reported their own results a couple of weeks ago.
"In fiscal 2015, we delivered revenue growth, operating margin improvement, EPS expansion and solid cash generation despite a mixed market environment," said Sanmina CEO Jure Sola in a press statement. "Our focus on executing our core strategy is evident in our results."
Sanmina shares have now gained more than 35% since bottoming out in August, but investors are still only looking at flat 52-week returns. The stock trades at 11 times trailing earnings, well below the industry average.
Anders Bylund has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.