8-K: Sanmina Reports Fiscal Q2 2024 Results, Revenue at $1.83 Billion

Sanmina Corporation announced its fiscal second quarter 2024 financial results, reporting revenue of $1.83 billion and providing an outlook for the next quarter.

Summary

• Sanmina Corporation reported its financial results for the fiscal second quarter ended March 30, 2024.
• The company's revenue for the quarter was $1.83 billion.
• GAAP operating margin was 4.1%, while non-GAAP operating margin was 5.4%.
• GAAP diluted earnings per share (EPS) was $0.93, and non-GAAP diluted EPS was $1.30.
• Cash flow from operations was $72 million, and the company ended the quarter with $651 million in cash and cash equivalents.
• The company noted some positive movement in previously depressed end-markets.
• Sanmina provided an outlook for the fiscal third quarter ending June 29, 2024, projecting revenue between $1.8 billion and $1.9 billion.
• They expect GAAP diluted EPS to be between $0.95 and $1.05, and non-GAAP diluted EPS to be between $1.22 and $1.32 for the next quarter.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive due to the company meeting expectations, seeing positive market movement, and expressing optimism for future improvement, although macroeconomic uncertainty remains a concern.

Positives

• Sanmina's financial results were in line with their outlook.
• The company saw positive movement in some end-markets that had been depressed.
• Management is optimistic about sequential improvement throughout 2024.
• The company has a strong cash position with $651 million in cash and cash equivalents.

Negatives

• There is still macroeconomic uncertainty affecting the business.
• The company's GAAP operating margin was 4.1%, which is lower than the non-GAAP margin of 5.4%.

Risks

• Adverse changes in key markets could impact future sales and net income.
• The company relies on a small number of customers for a substantial portion of its sales.
• International operations pose risks.
• Geopolitical uncertainty, including the war in Ukraine and conflict in the Middle East, could affect the business.

Future Outlook

Sanmina expects revenue between $1.8 billion and $1.9 billion for the fiscal third quarter ending June 29, 2024, with GAAP diluted EPS between $0.95 and $1.05 and non-GAAP diluted EPS between $1.22 and $1.32. They also anticipate sequential improvement throughout 2024.

Management Comments

• Jure Sola, Chairman and Chief Executive Officer, stated that their focused execution and operating discipline yielded financial results in line with their outlook.
• He also mentioned that they started to see positive movement in some end-markets that have been notably depressed.
• The management team remains optimistic about sequential improvement as they progress through 2024.

Industry Context

Sanmina operates in the Electronics Manufacturing Services (EMS) market, serving various sectors including industrial, medical, defense, aerospace, automotive, communications networks, and cloud infrastructure. The results reflect the current economic environment and the company's ability to navigate market fluctuations.

Comparison to Industry Standards

• Sanmina's performance can be compared to other major players in the EMS industry such as Jabil, Flex, and Celestica.
• Jabil, for example, reported a revenue of $8.4 billion in their most recent quarter, which is significantly higher than Sanmina's $1.83 billion, reflecting the scale differences between the companies.
• Flex reported revenue of $7.4 billion in their most recent quarter, also higher than Sanmina, indicating a larger operational scale.
• Celestica reported revenue of $2.0 billion in their most recent quarter, which is closer to Sanmina's revenue, suggesting a more direct comparison.
• Sanmina's operating margin of 4.1% (GAAP) and 5.4% (non-GAAP) is within the range of what is typically seen in the EMS industry, but specific comparisons would require a detailed analysis of each company's financial statements and accounting practices.
• The company's focus on specific sectors like industrial, medical, and defense may provide a competitive advantage in those areas, but also exposes them to sector-specific risks.

Stakeholder Impact

• Shareholders will be interested in the company's performance and future outlook.
• Employees will be affected by the company's financial health and strategic direction.
• Customers will be concerned with the company's ability to deliver quality products and services.
• Suppliers will be impacted by the company's purchasing decisions and financial stability.
• Creditors will monitor the company's debt levels and ability to repay obligations.

Next Steps

• Sanmina will hold a conference call on April 29, 2024, to review the financial results and outlook.
• The company will continue to focus on execution and operating discipline.
• They will monitor market conditions and adjust strategies as needed.

Key Dates

Keywords

Sanmina, Manufacturing Solutions, Financial Results, Earnings, Revenue, Operating Margin, EPS, Cash Flow, Outlook, Electronics Manufacturing Services