Solectron ( SLR) posted an improved fiscal fourth-quarter profit despite a drop in revenue, but the company offered a forecast for the current quarter that fell short of Wall Street's expectation.

The Milpitas, Calif., contract manufacturer reported net income of $10.3 million, or 1 cent a share, for the fourth quarter ended Aug. 31. A year earlier, the company posted a profit of $2.7 million, or less than 1 cent a share, including nearly $43 million in income from discontinued operations.

Excluding certain items, Solectron reported non-GAAP fourth-quarter income of $37 million, or 4 cents a share. Per-share results on this basis matched analysts' average estimate, according to Thomson First Call.

Solectron's sales dropped to $2.4 billion from $3.04 billion a year earlier and were slightly shy of Wall Street's forecast for sales of $2.49 billion. In June, Solectron predicted fourth-quarter revenue of $2.4 billion to $2.6 billion, and a profit, before items, of 3 cents to 5 cents a share.

For the fiscal first quarter, Solectron expects earnings from continuing operations, before items, of 2 cents to 4 cents a share, with sales of $2.3 billion to $2.5 billion. Analysts, on average, currently project earnings of 5 cents a share and sales of $2.63 billion.

The company said it is "well positioned" for fiscal 2006, as it focuses on expanding contracts with current customers and gaining new business in nontraditional markets.

Solectron shares recently traded at $3.73 in the after-hours session, down 6 cents, or 1.6%.

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