Stocks quoted in this article:
Solectron (SLR – 30.75), the world's largest contract electronics manufacturer, announced fiscal first-quarter results after yesterday's market close. Earnings of 29 cents per share beat the Street views by a penny. Revenue doubled, while net income rose 74 percent. The company forecast earnings for 2001 of $1.22 to $1.25 per share, compared to consensus figures of $1.15.
This was excellent news, since the contract manufacturing firms have suffered steep stock declines recently, due to warnings of slower sales from their clients who produce computers. Shares of SLR are trading at about half of their 52-week high of 52-5/8 on October 24. Yet, this morning on CNBC, the company's chairman and CEO painted a rosy picture for SLR's future. He stated that a slowing economy causes more companies to outsource in order to save money. Demand for data networking and telecommunications products was said to have offset the slowdown in personal computer and mobile phone manufacturing. But, some analysts feel it is only a matter of time before the slowdown hits SLR as well. Only time will tell.