Sanmina Halts Buybacks as AI Ramp Takes Cash Priority

Earnings
โดย Yahoo Finance·US·Read original
Summary · why it matters

Sanmina repurchased no shares in its June quarter, leaving about $600 million of board authorization unused, and the cash is instead funding an AI-driven expansion. The company's stock has fallen 26.5% over the past three months and trades about 32% below its 52-week high, despite being up 65.5% over the past twelve months. Over the last three years, Sanmina shrank its share count by about 2.4% a year on average, which widened the gap between EPS growth of 4.4% and net income growth of 2.6%. However, the share count has fallen just 0.5% over the past year, as the company prioritizes spending on metal fabrication for AI system racks, high-technology PCBs, and a new medium-voltage transformer business. Revenue reached $3.46 billion in fiscal Q3 2026, up 69.7% year over year, but free cash flow dropped to $23.6 million from $342 million in the prior quarter due to working capital investment. Management expects the pressure to continue, with the next-generation accelerated compute program set to contribute revenue in fiscal Q1 2027, and the 8% non-GAAP operating margin must hold above the long-term 6% to 7% range. Trailing free cash flow still covers shareholder payouts about 2.5 times, and net debt is near 0.5 times EBITDA, so the buyback pause is a preference, not a limit.

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Sanmina Corporation
SANM
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Halts buybacks, prioritizing AI capex, with FCF drop and margin pressure

Artificial Intelligence▲ · 2 stocks
Information Technology▲ · 1 stocks

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