CIBC World downgraded Solectron (SLR ) to sector perform from sector underperform.
Analyst Todd Coupland says he downgraded the contract manufacturer on valuation, as the stock has appreciated 35% since Apr. 25. With third-quarter results now posted, he advises investors to move to the sidelines, and focus on the new CEO's future plans, which will be unveiled in September, which include elements to improve revenue growth and profitability. He notes third-quarter results are reflected in restructuring expenses.
Coupland says the pro forma loss exceeded his two-cent loss estimate, and says third-quarter sales of $2.8 billion were flat sequentially, and down 7% year over year. Coupland says the fourth-quarter guidance of a two-cent to six-cent pro forma loss on $2.6 billion to $2.9 billion in revenues falls within his range of expectations.