Sanmina Q2 Earnings Surpass Estimates on Higher Revenues

Sanmina Corporation SANM reported strong second-quarter fiscal 2025 results, with adjusted earnings and revenues surpassing the Zacks Consensus Estimate. 

The California-based global electronics manufacturing services provider reported a top-line expansion year over year, owing to healthy momentum across all segments. Strong growth in free cash flow is a positive.

SANM’s Net Income

Net income on a GAAP basis in the quarter was $64.2 million or $1.16 per share compared with $52.5 million or 93 cents per share in the prior-year quarter. Top-line expansion supported growth in net income.

Non-GAAP net income in the reported quarter was $78 million or $1.41 per share compared with $73.9 million or $1.30 in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate of $1.38. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

SANM’s Revenues

Net sales during the quarter increased to $1.98 billion from $1.83 billion reported in the year-ago quarter, primarily driven by growth across multiple end markets. The top line beat the consensus estimate by $34 million. 

In the fiscal second quarter, Integrated Manufacturing Solutions generated $1.59 billion in revenues, up 9.7% year over year. The segment contributed 80.2% to revenues. Solid sales growth was primarily driven by the communications networks and cloud infrastructure end markets.

Components, Products and Services revenues increased to $391.9 million from $382.9 million in the prior-year quarter, backed by growth in several end markets.

End-market wise, Industrial & Energy, Medical, Defense & Aerospace, and Automotive markets generated $1.25 billion in revenues compared with $1.23 billion in the prior-year quarter. The company generated $732.9 million from Communications Networks and Cloud Infrastructure compared with $609.3 million in the year-ago quarter.

SANM’s Other Details

Gross profit was $176.2 million compared with $154.8 million in the year-ago quarter. The improvement is driven by a favorable mix and improved operational efficiency. Non-GAAP operating income totaled $110.6 million compared with $99.5 million in the year-ago period. Non-GAAP operating margin was 5.6%, marginally up from 5.4% in the prior-year quarter.

SANM’s Cash Flow & Liquidity

In the second quarter of fiscal 2025, Sanmina generated $156.9 million of net cash from operating activities compared with $72.3 million in the previous year’s quarter. As of March 29, 2025, the company had $647.1 million in cash and cash equivalents and $291.4 million in long-term debt. During the quarter, the company repurchased approximately 1.03 million shares for approximately $84 million.

SANM’s Outlook

For the third quarter of fiscal 2025, revenues are expected to be in the range of $1.925-$2.025 billion. GAAP earnings per share are forecasted to be between $1.05 and $1.15. Management estimates non-GAAP earnings per share in the band of $1.35-$1.45.

SANM’s Zacks Rank

Sanmina currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

CGI Group GIB is scheduled to release second-quarter fiscal 2025 earnings on April 30. The Zacks Consensus Estimate for earnings is pegged at $1.5 per share, indicating an improvement of 2.74% from the year-ago figure. 
 
InterDigital IDCC is scheduled to release first-quarter 2025 earnings on May 1. The Zacks Consensus Estimate for earnings is pegged at $2.05 per share, indicating a decline of 42.74% from the year-ago figure. 

Qualcomm QCOM is scheduled to release second-quarter fiscal 2025 earnings on April 30. The Zacks Consensus Estimate for earnings is pegged at $2.82 per share, indicating an improvement of 15.57% from the year-ago figure. 

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This article originally published on Zacks Investment Research (zacks.com).

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