Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of electronics contract manufacturer Sanmina-SCI (NAS: SANM) soared 19% today, after its quarterly results topped Wall Street expectations.
So what: Sanmina shares have slumped in 2012 on weaker-than-expected growth, but today's wide fourth-quarter earnings beat -- adjusted EPS of $0.46 versus the consensus of just $0.34 -- suggests that things are starting to turn. Management also announced a restructuring plan for two of its manufacturing facilities, which should improve operational costs and capacity utilization, giving investors plenty of optimism over its profitability going forward.
Now what: For the current quarter, management now sees adjusted EPS of $0.31-$0.37 on revenue of $1.5 billion-$1.55 billion, a little below Wall Street's estimate of $0.37 and $1.6 billion. According to Chairman and CEO Jure Sola:
Our first quarter fiscal 2013 guidance reflects continued uncertainty in the market. Though the macro-environment is challenging, we have taken action to position us for improved performance in fiscal 2013.
With the stock still off about 30% from its 52-week high and trading at a forward P/E of 6, there might even be some room left to buy into that bullishness.
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The article Why Sanmina Shares Surged originally appeared on Fool.com.
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