April 11, 2011 / 4:18 PM / in 7 years

UPDATE 2-Benchmark Electronics cuts Q1 view on soft demand, shares down 4pct

* Sees Q1 adj EPS $0.23-$0.26 vs prior view $0.30-$0.36

* Sees Q1 rev $540 mln vs prior view $565-$605 mln

* Sees rebound in Q2 (Adds analysts comments, updates share price)

April 11 (Reuters) - Contract electronics manufacturer Benchmark Electronics Inc lowered its first-quarter outlook, hurt by softer-than-expected demand and as some of its clients look to get rid of excess inventory, sending its shares down 4 percent.

The company that competes with Flextronics International , Celestica Inc , Nam Tai Electronics Inc , Jabil Circuit Inc , and Plexus Corp said it anticipates sales to rebound in the second quarter.

The outlook cut may be the result of a slowing sales cycle due to lower technology spend and increased competition, Ticonderoga Securities analyst Brian White wrote in a research note.

“Our view remains that the easy money in the electronics manufacturing services stocks has already been made and now the group is fighting a decelerating sales cycle, a lower margin expansion opportunity and the risk of approaching peak profit levels,” White said.

Benchmark now expects earnings of 23-26 cents per share, excluding items, down from its earlier estimate of 30-36 cents per share.

It lowered its revenue forecast to about $540 million, from $565-$605 million earlier.

Analysts on average were expecting adjusted earnings of 33 cents per share on revenue of $587.3 million, according to Thomson Reuters I/B/E/S.

Shares of the Angleton, Texas-based company were trading at $17.69 on the New York Stock Exchange on Monday. (Reporting by Rachana Khanzode in Bangalore; Editing by Jarshad Kakkrakandy)

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