Sanmina shares drop more than 10% on outlook, layoffs
Sanmina Corp. shares dropped in the extended session Monday after the electronics manufacturing services provide issued a disappointing outlook and announced a "right-sizing" plan. Sanmina shares fell 14% after hours, following a 1% rise in the regular session to close at $31.80. For the first fiscal quarter, Sanmina expects adjusted earnings of 65 cents to 75 cents on revenue of $1.73 billion to $1.83 billion, while analysts surveyed by FactSet had forecast earnings of 87 cents a share on revenue of $2.18 billion. "We expect demand to be soft in the first half of the fiscal year as a result of excess inventory in the channel, slower than anticipated 5G deployment and global economic uncertainty," said Hartmut Liebel, Sanmina's chief executive since the beginning of the month, in a statement. "As a result, we have initiated a plan to right size the organization to further improve operational efficiencies and optimize our cost structure." While not specifying how many layoffs, the company said it expects to spend about $10 million to $20 million, mostly for severance costs, and also buy back up to $200 million in stock. San Jose, Calif.-based Sanmina has about 47,000 employees. The company reported fiscal fourth-quarter net income of $19.8 million, or 27 cents a share, compared with $782,000, or a penny a share, in the year-ago period. Adjusted earnings were 84 cents a share. Revenue rose to $1.89 billion from $1.88 billion in the year-ago quarter. Analyst had forecast earnings of 77 cents a share on revenue of $1.93 billion.
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