Sanmina Corp (SANM, Financial) released its 8-K filing on July 29, 2024, detailing its financial performance for the fiscal third quarter ended June 29, 2024. Sanmina Corp is a provider of integrated manufacturing solutions, components, and after-market services to original equipment manufacturers in various sectors, including communications networks, storage, industrial, defense, and aerospace. The company operates in two business segments: Integrated Manufacturing Solutions and Components, Products, and Services.
Performance Overview
Sanmina Corp reported revenue of $1.84 billion for the third quarter, slightly below the analyst estimate of $1.859 billion. The company's GAAP diluted earnings per share (EPS) came in at $0.91, missing the analyst estimate of $0.95. Non-GAAP diluted EPS was reported at $1.25.
Financial Highlights
Despite the shortfall in revenue and EPS, Sanmina Corp achieved a GAAP operating margin of 4.5% and a non-GAAP operating margin of 5.3%. The company generated $90 million in cash flow from operations and ended the quarter with $658 million in cash and cash equivalents.
Income Statement Summary
| Metric | Q3 FY2024 | Q3 FY2023 |
|---|---|---|
| Net Sales | $1.84 billion | $2.21 billion |
| Gross Profit | $153.5 million | $183.2 million |
| Operating Income | $82.4 million | $107.4 million |
| Net Income | $51.6 million | $76.5 million |
| GAAP Diluted EPS | $0.91 | $1.28 |
Balance Sheet and Cash Flow
Sanmina Corp's balance sheet remains robust with total assets amounting to $4.66 billion, down from $4.87 billion at the end of September 2023. The company reported total current assets of $3.69 billion and total current liabilities of $1.82 billion. Long-term debt stood at $299.7 million, a slight decrease from $312.3 million in September 2023.
Commentary and Outlook
"We delivered third quarter results in line with our outlook. We are starting to see stabilization and demand improve going into our fourth quarter, and we expect to see growth in fiscal 2025," stated Jure Sola, Chairman and Chief Executive Officer.
For the fiscal fourth quarter ending September 28, 2024, Sanmina Corp expects revenue between $1.9 billion to $2.0 billion and GAAP diluted EPS between $1.02 to $1.12. Non-GAAP diluted EPS is projected to be between $1.30 to $1.40.
Analysis
Sanmina Corp's performance in the third quarter reflects the challenges faced by the company in a competitive market. The decline in revenue and net income compared to the previous year highlights the pressure on margins and the need for strategic adjustments. However, the company's strong balance sheet and cash flow generation provide a solid foundation for future growth.
Value investors may find Sanmina Corp's current valuation attractive, especially given the company's efforts to stabilize demand and improve profitability. The outlook for the fourth quarter and fiscal 2025 suggests potential for recovery and growth, making it a stock worth monitoring closely.
Explore the complete 8-K earnings release (here) from Sanmina Corp for further details.
