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Profit Slumps at Solectron

Solectron (SLR) posted a decline in fiscal first-quarter profit and sales Thursday but still beat top-line expectations.

In addition, the company offered second-quarter guidance suggesting results could fall short of current Wall Street targets.

The Milpitas, Calif., contract manufacturer reported net income of $24 million, or 3 cents a share, for the first quarter ended Nov. 30. A year earlier, the company posted a profit of $58.2 million, or 6 cents a share.

Solectron reported net income from continuing operations of $20.2 million, or 2 cents a share, for the first quarter ended Nov. 30. A year earlier, the company posted a profit from continuing operations of $47.5 million, or 5 cents a share.

Excluding certain items, Solectron reported first-quarter income of $28.1 million, or 3 cents a share, compared with profit of $51.4 million, or 5 cents a share, a year earlier. That was in line with analysts' average estimate gathered by Thomson First Call.

Solectron's sales dropped to $2.46 billion from $2.69 billion a year earlier, but still exceeded Wall Street's forecast of $2.39 billion. The results fell in line with the company's guidance, which called for first-quarter revenue of $2.3 billion to $2.5 billion and earnings before items of 2 cents to 4 cents a share.

Looking forward, Solectron forecast non-GAAP earnings from continuing operations of 2 cents to 4 cents a share on sales of $2.3 billion to $2.5 billion for the fiscal second quarter. Analysts, on average, currently project earnings of 4 cents a share on sales of $2.41 billion for the second quarter.

Solectron shares shed a penny in recent after-hours trading after closing up 13 cents, or 3.5%, at $3.85..

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