SAN JOSE -- Sanmina-SCI Corp.'s fourth-quarter sales fell 2% to $2.77 billion versus last year, the company said last night. The company provided preliminary results but did not release full results due to an ongoing restatement of past financial reports, It said it expects to post between a penny-per-share loss and profit of 1 cent per share, excluding one-time items.

For the year, sales fell 6% to $10.96 billion.

On a conference call with analysts, Sanmina guided for first-quarter sales of $2.7 billion to $2.85 billion and for fiscal 2007 sales of $11.8 billion to $12.3 billion. The company forecast operating margins of 7 to 7.5%.

In a research note, Deutsche Bank analyst Carter Shoop called the fiscal 2007 guidance "bullish," adding, "We believe the low-end of guidance will prove difficult to achieve."
DB pegged Sanmina's 2007 sales at $11 billion on gross margins of 6.4%.

Sanmina management also said it would end its ODM business acquired three years ago. According to Shoop, the firm "appears to be shopping around its PC business."

For the quarter, inventory turns fell 0.3 times sequentially and 2.5 times year-on-year to 7.8 turns. It was the seventh straight quarter than inventory turns declined. The firm blamed the results on its exiting of the ODM business, soft demand for settop boxes and PCs, sluggish PCB shipments and inventory and warranty charges.

Sanmina-SCI has said it will take additional expenses of $125 million to $150 million for errors in its stock option practices dating back to 1997.

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