How Much Have Buybacks Lifted Sanmina’s Earnings Per Share?
Shares of Sanmina (SANM) have returned 68% over the past twelve months, easily outpacing the 17.0% return of the S&P 500. Share repurchases may be part of the case for owning the electronics manufacturer, given that the company operates with about 7% fewer shares than it had three years ago. Yet Sanmina bought back no shares in its latest reported quarter. So how much more does each share earn after three years of buybacks?
Sanmina’s Flat Profit Is Split Among Fewer Shares
Net income at Sanmina grew just 0.2% a year over the last three years, but earnings per share advanced 2.2% a year during the same period. A declining share count explains the difference: a nearly static pool of profit is being divided among fewer shares.
That reduction has not been a straight line. The share count fell about 7.6% over the first two of those years, then rose 0.5% over the last twelve months. The latest rise came even though Sanmina’s buybacks exceeded the stock it issued as pay by $150 million, or 1.3% of its market value, because the company also issued shares as part of its ZT Systems acquisition.
Sanmina’s Factories Produce More Cash Than Repurchases Use
Sanmina pays for its buybacks with the cash left over from contract electronics manufacturing for other companies, but the profit margins on that work are thin. The company operates with an operating margin of 5.5%, against the 18.5% margin for the S&P 500. Maintaining operations also requires holding significant parts and products on hand, and inventory equals 24.7% of revenue. Since Sanmina owes its suppliers 0.8 times that inventory, existing supplier credit does not cover the full stockpile.
Even so, the cash has been more than enough. Sanmina pays no dividend, and its free cash flow over the last twelve months amounted to 2.48 times what the company spent on buybacks. One part of Sanmina’s business is also expanding rapidly, helped by an acquisition. Sales to communications networks, cloud and AI infrastructure customers rose 173.2% from a year earlier in fiscal Q3 2026, with the acquired ZT Systems business contributing $1.1 billion in the quarter.
Sanmina Has Cash But Skipped Fiscal Q3 Repurchases
Debt is not holding the company back. Net debt sits at just 0.5 times EBITDA, and operating profit covers interest expenses 7.4 times over.
Yet during the fiscal Q3 2026 call, management said it had not repurchased any shares in the quarter, and about $600 million was still available under the current buyback program. Management expects working capital to rise ahead of anticipated growth in its core business and its ZT Systems business, and said this will affect cash flow from operations. On the same call, executives raised the fiscal 2026 revenue forecast to $14.15 billion at the midpoint, up from a previous projection of $14.0 billion.
Investors will be watching when Sanmina reports its fiscal Q4 2026 results next. A second straight quarter with no repurchases would show that the company is putting its cash into growth before buybacks.
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