* Plexus reported recent Q2 revenue increases have been primarily supported by upsurge demand in the company’s services for the industrial and medical end-markets. Top customers include GE, Siemens, KLA-Tencor, and Intermec. The company is also beginning to show more effectiveness at managing margins.
* Celestica expects to continue to restructure to help drive operating margins upward. VO believes efforts will sustain through year-end as this is management’s primary focus. The company continues to drive its lean manufacturing initiatives.
* Foxconn is showing improvements in execution. VO believes major acquisitions to help improve earnings growth continue to be a viable option for management.
* Flextronics recently reported its numbers – missing on revenues but strongly beating margin estimates. The company anticipates more than US$1 billion in new revenues that should be realized in the second half of this year. Cash flow management is continually moving in the right direction.
* Jabil continues to focus on process and execution. While the company is taking steps to diversify its end-market mix, VO believes the company is taking aggressive steps to win new business from the industrial and military/defense end-markets.
* Sanmina-SCI’s Lenovo (IBM) business is likely to remain with the company for some time. However, Sanmina-SCI’s PC market segment, which provides the company with some of its highest returns, appears to be showing little signs of organic growth. Meanwhile, the company’s components business appears to be gaining traction which could help to improve overall margins as the company further drives vertical integration initiatives.
VentureOutsource.com, May 2005
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