Sanmina-SCI (SANM) - Get Report swung to a third-quarter profit as revenue rose more than 7%, but the company said it will take a charge of up to $100 million to reduce capacity in its North American and Western European operations.
The contract electronics maker said after the bell Tuesday that net income was $11.4 million, or 2 cents a share, compared with a loss of $12.2 million, or 2 cents a share, a year earlier.
Revenue rose to $3.07 billion, from $2.86 billion a year earlier.
On a pro forma basis, which excludes restructuring and other costs, earnings rose to $34.4 million, or 7 cents a share, from $6.4 million, or a penny a share. The results edged the Thomson First Call consensus expectation of 6 cents a share.
The consensus revenue estimate was $3.01 billion.
The company's shares had climbed more than 9% in after-hours trading after closing the regular session up 17 cents to $6.87.
Sanmina cited second-quarter growth in key customer end-markets and increased demand for its high-end EMS product programs, but it plans to cut capacity.
"Our Eastern European, Latin American and Asian operations are operating more efficiently than previously forecast. As a result, we plan to realign our manufacturing operations in high-cost locations, and leverage our expanding capacity and technical capabilities in more cost-efficient regions such as Eastern Europe, Latin America and Asia," said Chairman and Chief Executive Jure Sola.
The company didn't specify over what length of time it would incur the charge of up to $100 million.
In addition, Sanmina reaffirmed its fourth-quarter pro forma earnings guidance of 8 cents to 10 cents a share on revenue of $3.1 billion to $3.3 billion; both ranges are in line with analysts' estimates.