Shares of tech-systems developer Sanmina rally 20% after upbeat outlook

Shares of Sanmina Corp. rallied after hours on Monday after the tech-systems developer and services provider forecast second-quarter results that were above Wall Street’s expectations and said it expected stronger results heading into the second half of the year.

The gains arrived after the company — which produces complex circuit boards, helps companies make and test things, and makes products and technology for the medical, communications, defense and other industries — warned in November that its customers had grown more skittish amid “ongoing macroeconomic uncertainty.”

But on Monday, Sanmina
said it expected second-quarter revenue of between $1.825 billion and $1.925 billion, above FactSet forecasts for $1.8 billion. Management forecast adjusted earnings per share of $1.20 to $1.30, above analysts’ expectations for $1.02.

“Our outlook for the second quarter is essentially flat with the prior quarter and is in line with our expectations for the first half of fiscal 2024,” Chief Executive Jure Sola said in a statement. “We believe we will see sequential improvement as we move into the second half of the year.”

Shares jumped 19.5% after hours on Monday.

Sanmina designs things like lighting systems, sensors in cars and satellite communication technology. In November, when Sanmina reported fourth-quarter results, Sola warned that some of its customers were “continuing to adjust inventory levels.”

The company on Monday reported first-quarter net income of $57.07 million, or 98 cents a share, compared with $92 million, or $1.54 a share, in the same quarter that ended in 2022. Sanmina reported adjusted earnings per share of $1.30.

Revenue of $1.87 billion was down from $2.36 billion in the prior-year quarter.

Analysts polled by FactSet expected adjusted earnings per share of $1.15 on revenue of $1.87 billion.

Shares of Sanmina are down 8.8% over the past 12 months.

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