Tuesday, April 23, 2013

Why Sanmina Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Sanmina (NASDAQ: SANM  ) have popped today by as much as 16% after the company reported earnings.

So what: Revenue in the fiscal second quarter was $1.43 billion, and non-GAAP earnings per share came in at $0.30. That top-line result was in line with consensus estimates while the bottom-line was a beat relative to estimates. CEO Jure Sola said the company continues to face a "soft market environment" but that Sanmina continues to invest in technology and services, with new program ramps on the horizon.

Now what: The company provided outlook for the coming quarter ending June, with revenue expected in the range of $1.45 billion to $1.5 billion. Non-GAAP earnings per share should be $0.32 to $0.38. Following the results, Needham boosted its price target on the stock from $12 to $13 while keeping its buy rating, citing solid execution amid a tough environment. The analyst believes infrastructure leverage will pay off later in the year along with cost efficiencies.

Interested in more info on Sanmina? Add it to your watchlist by clicking here.

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