S&P UPGRADES RECOMMENDATION ON SHARES OF SANMINA-SCI TO BUY FROM HOLD
(Standard & Poor's)
SANM posts Sep-Q GAAP loss per share of $0.41, vs. a $5.35 loss, which is wider than our estimate for a $0.29 loss. Revenue fell 21% from a year ago, but rose 12% sequentially, reflecting a cyclical downturn for the EMS industry in 2009 that we project will evolve into a rebound in 2010. We expect recent restructurings and debt reductions to help margins ahead. Switching to operating estimates excluding restructuring costs, we estimate FY 10 (Sep) EPS of $0.45, and EPS of $0.70 for FY 11. We are raising our P/E and price-to-book based 12-month target price to $10 from $8.