Earnings

Sanmina Sales Soar 79% — Management Expects Another 27% Growth At Its Forecast Midpoint

Adjusted quarterly earnings beat estimates, but higher spending on property and equipment cut free cash flow to $83 million.

Matteo Parrino Jonathan Ponciano

Matteo Parrino, Jonathan Ponciano

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Sanmina Sales Soar 79% — Management Expects Another 27% Growth At Its Forecast Midpoint

Sanmina, which designs and manufactures electronics and complete systems for equipment makers, grew annual sales 79% to $14.53 billion, according to unaudited results released Monday with its SEC filing. Management expects about 27% more revenue at the midpoint of its fiscal 2027 forecast, following a year that included integrating ZT Systems.

Earnings Beat, With Acquisition Costs Excluded

Fourth-quarter revenue reached $3.86 billion, compared with $2.10 billion a year earlier. Adjusted earnings of $4.43 per share topped the Zacks Investment Research average estimate of $3.27; sales also exceeded its $3.48 billion estimate.

Under standard accounting, quarterly earnings were $2.14 per share, versus $0.88 a year earlier. Adjusted earnings compared with $1.67 in the prior-year quarter. For the full year, earnings reached $6.85 per share, versus $4.46, while adjusted earnings reached $13.28, versus $6.04.

Sanmina's quarterly operating margin widened to 6.0% from 3.7%; its adjusted margin rose to 9.0% from 6.0%. Annual adjusted operating profit increased 130%, and the adjusted margin reached 7.4%, compared with 5.7%.

The adjusted figures exclude stock-based pay, acquisition-related expenses and other items. Quarterly acquisition, integration and related costs totaled $84.2 million, including a $78 million change in the value of contingent consideration — payments tied to the ZT purchase. Those annual costs reached $221.2 million, including a $150 million valuation adjustment.

ZT Adds To Core Business Growth

Jure Sola, Sanmina's chairman and CEO, said the ZT Systems integration strengthened its cloud and AI infrastructure business. The company also “grew our core Sanmina business by double digits year-over-year,” Sola said Monday.

Sanmina serves industrial, medical, defense and aerospace, automotive, communications and cloud infrastructure customers, with logistics, repair and product support alongside manufacturing. In fiscal 2025, its assembly, testing and order-fulfillment business generated approximately 80% of revenue; components, products and services accounted for approximately 20%. It supports customers across 20 countries on four continents.

Management forecasts fiscal 2027 sales of $17.5 billion–$19.5 billion and adjusted earnings of $15.50–$17.50 per share. It expects about 24% adjusted earnings growth at the midpoint, alongside the approximately 27% revenue increase. Its adjusted operating-margin forecast is 7.0%–7.5%, compared with fiscal 2026's 7.4%.

Capital Spending Takes More Cash

Operating cash flow rose to $242 million in the quarter from $199.1 million a year earlier. But purchases of property and equipment climbed to $159.1 million from $62.3 million, leaving free cash flow — operating cash less those purchases — of $83 million, down from $136.8 million.

For the year, operating cash flow reached $944 million and free cash flow totaled $541 million. Sanmina ended the quarter with $1.68 billion in cash and equivalents. It bought back 0.8 million shares for $154 million during the quarter and approximately 2.4 million shares for $393 million over the year.

Long-term debt stood at $1.92 billion at the fiscal year-end, compared with $283 million a year earlier. On Tuesday, October 27, lenders supplied an additional $70 million, bringing the term loan A balance back to $1.4 billion. Sanmina also extended debt maturities to October 28, 2031, for that loan, its $1.5 billion revolving facility and its $600 million delayed-draw facility.

The agreement allows Sanmina to draw on the delayed-draw facility through April 27, 2027, and bases pricing on debt ratings rather than leverage.

For the first quarter ending January 2, 2027, Sanmina expects sales of $3.8 billion–$4.1 billion, adjusted earnings of $3.50–$3.85 per share and an adjusted operating margin of 7.0%–7.5%.

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