Electronic Contract Manufacture (ECM) Sector Message Board

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Strategies & Market Trends : Electronic Contract Manufacture (ECM) Sector

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To: Paul Senior who wrote (2529)	6/20/2002 9:30:30 PM
From: rich evans	Read Replies (1) of 2542

Solectrons report was another pushout IMO. New business is replacement with no growth. SGA remains above 7%. ROIC is less then cost of capital. New restructure charges huge at 313 mill with another 150 promished to come. They are doing the right things I guess but not very nimble compared to JBL or even FLEX. Services was also flat. Something I did not expect. But at this price, I guess it is a good buy if you still believe in the EMS story. But that story has not tested out well in the downturn. SLR,SANM, CLS business down 40%. JBL down 20%, FLEX flat. But little profits and my Pappy told me it was all about earnings per share and growth in earnings. Maybe he was right. SLR says it will take them 5 more quarters to get to 4% or so operating margin.This probably equals about 3% net. With 823 mill shares out, this is not going to give us the earnings per share we need to get this stock back up much and certainly not back to old prices. Bummer Rich

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