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February 8, 1999


By CBR Staff Writer

SCI Systems Inc, the Huntsville, Alabama-based contract manufacturer, has warned investors that results for its third and fourth quarters “will not meet earlier expectations but, however, should meet or exceed year-earlier results.” Last week the company reported disappointing second quarter figures, with revenues at $1.74bn compared with $1.79bn in the same quarter last year, and income was down to $32.4m from $37.6m last year. Sales for the first six months of the year were down to $3.13bn compared with $3.53bn last year with income for the six months at $62.4m, down from $73.9m last time. SCI blamed customer market share shifts and degrading prices for the shortfall, which sent its share price plunging. It said a multiplant headcount reduction was in progress. But as investment web site The Motley Fool commented on Friday, it’s hard to see any industry downturn reflected in the figures of SCI’s competitors. Solectron Corp saw its sales rise 71% recently, Jabil Circuit Inc’s revenues were up 40%, and Flextronics International Ltd was up 69%. At least four of SCI’s big customers, Apple Computer Inc, Compaq Compute Corp, Dell Computer Corp and Hewlett-Packard Co, have all reported rises in system sales of late. SCI won the contract for manufacturing Silicon Graphics Inc’s new NT workstations earlier this month (CI No 3,573).

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