Why Is Sanmina (SANM) Down 5.8% Since Last Earnings Report?

Core Viewpoint - Sanmina reported strong fourth-quarter fiscal 2025 results, with both revenue and net income exceeding estimates, driven by growth across multiple end markets [2][3][5]. Financial Performance - Net income on a GAAP basis for Q4 was $48.1 million or $0.88 per share, down from $61.4 million or $1.09 per share in the prior year [3]. - Non-GAAP net income for Q4 was $91.5 million or $1.67 per share, compared to $80.3 million or $1.43 in the prior year, surpassing the Zacks Consensus Estimate of $1.57 [3]. - For the full year 2025, GAAP net income was $245.9 million or $4.46 per share, up from $222.5 million or $3.91 per share in 2024 [4]. Revenue Growth - Q4 revenues increased to $2.09 billion from $2.01 billion year-over-year, beating the consensus estimate by $46 million [5]. - For the full year 2025, revenues rose to $8.13 billion from $7.56 billion in 2024 [6]. - The Integrated Manufacturing Solutions segment generated $1.68 billion in Q4 revenues, up 3.3% year-over-year, contributing 80.2% to total revenues [6]. Segment Performance - The Industrial & Energy, Medical, Defense & Aerospace, and Automotive markets generated $1.247 billion in revenues, slightly down from $1.253 billion [7]. - Communications Networks and Cloud Infrastructure revenues increased to $849 million from $765 million year-over-year [7]. Profitability Metrics - Non-GAAP gross profit was $196.4 million, up from $175.5 million in the year-ago quarter, driven by improved operational efficiency [8]. - Non-GAAP operating income totaled $126.4 million compared to $107.3 million in the prior year, with a non-GAAP operating margin of 6%, up from 5.6% [8]. Cash Flow and Liquidity - In Q4, Sanmina generated $199.1 million of net cash from operating activities, compared to $51.9 million in the previous year [11]. - For the full year 2025, the company generated $620.7 million in cash, up from $340.2 million in 2024 [11]. - As of September 27, 2025, Sanmina had $926.3 million in cash and cash equivalents and $282.3 million in long-term debt [11]. Future Outlook - For Q1 of fiscal 2026, revenues are expected to be between $2.05 billion and $2.15 billion, with non-GAAP earnings per share estimated between $1.95 and $2.25 [12]. - Non-GAAP operating margin is projected to be in the range of 5.6% to 6.1% [12]. Market Sentiment - Since the earnings release, there has been an upward trend in estimates, with the consensus estimate shifting by 22.76% [13]. - Sanmina holds a Zacks Rank 1 (Strong Buy), indicating expectations for above-average returns in the coming months [15].