Image source: Sanmina.
What: Shares of Sanmina (SANM +6.74%) 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 (CLS +4.75%) saw its shares edging nearly 3% higher on no news of its own. Jabil Circuit (JBL +0.92%) 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.
