Solectron Misses Estimates
Solectron's
(SLR)
second-quarter loss narrowed significantly from a year ago thanks to smaller restructuring expenses. Adjusted for the charge in the latest period, the company earned $40 million, or 4 cents a share, a penny short of estimates.
On the bottom line, the contract electronics manufacturer lost $3.4 million in the 2005 quarter, compared with a loss of $68 million, or 8 cents a share, a year ago. Before discontinued operations, Solectron lost $4.7 million in the latest quarter compared with $89.7 million a year ago. Sales were $2.76 billion in the latest quarter compared with $2.89 billion a year ago.
Analysts had been forecasting earnings of 5 cents a share on sales of $2.71 billion in the latest quarter.
For the current third quarter, Solectron expects to earn 4 cents to 6 cents a share on sales of $2.6 billion to $2.8 billion. Analysts were forecasting earnings of 6 cents a share on sales of $2.91 billion.
"While we are pleased with sequential growth in second-quarter revenue, we are not seeing the anticipated growth from several customers, primarily in the consumer and computing markets," the company said. "We now expect that second-half revenues and earnings will not be higher than first-half results."
Solectron also announced that in the course of its Sarbanes-Oxley financial controls review it identified errors related to tax-account roll-forwards for 2002, 2003 and 2004. While the company doesn't think the errors are material to its financial statements, it will restate the results to fix the mistakes nonetheless.
The shares fell 44 cents, or 10%, to $3.82 in after-hours trading.