Solectron Affirms Guidance for Current Quarter, Sees Fiscal-Year 2002 Sales Below $16 Billion

		SOLECTRON LOGO Solectron (www.solectron.com), the world's leading supply-chain facilitator, provides a full range of manufacturing and supply-chain management services to the world's premier high-tech electronics companies. Solectron's offerings include new-product design and introduction services, materials management, high-tech product manufacturing, and product warrantyand end-of-life support. Solectron, based in Milpitas, Calif., is the first two-time winner of the Malcolm Baldrige National Quality Award for manufacturing. (PRNewsFoto)[AG JL] MILPITAS, CA USA

MILPITAS, Calif., Oct. 29 /PRNewswire/ -- Solectron Corporation (NYSE: SLR), the world's largest provider of electronics manufacturing and supply-chain services, today affirmed its financial guidance for the first quarter of fiscal 2002, and said full-year sales are likely to be below previous guidance. (Photo: http://www.newscom.com/cgi-bin/prnh/20001201/SLRLOGO ) "For our first quarter, which ends Nov. 30, we continue to expect sales of $2.8 billion to $3.2 billion and cash earnings per share* of 4 to 8 cents," said Koichi Nishimura, Solectron chairman, president and chief executive officer. "However, given the even more uncertain economic conditions that have emerged in the last two months, we expect to be below the low end of the full-year guidance, established in early August, of $16 billion to $18.5 billion in sales and cash earnings per share of 62 to 66 cents. In this environment, we will provide financial guidance based on our forward visibility, which right now is very limited. "We remain well-positioned to capture additional business related to the growing trend of brand-name electronics companies to outsource their manufacturing and supply-chain needs. Having said that, we believe electronics end-markets will remain relatively stable for the next four to six quarters," he said. During a daylong meeting with the financial community, Solectron said its complete supply chain approach meets the growing needs of OEM customers as they outsource more of their product design, manufacturing and after-sales services needs. "We are on the front edge of another wave of outsourcing from OEM customers, as they focus more tightly on their core competencies," Nishimura said. "We have steadily built the capabilities to meet these needs, and we are focused on delivering those capabilities in the form of end-to-end solutions to our customers' supply-chain challenges." During the meeting, Solectron executives provided details on the company's strategy and plans, including information about a stream of new outsourcing programs and competitive wins. In addition, the company outlined the following long-term financial metrics targets: annual sales growth of at least 25 percent; return on invested capital of 20 percent; 9.5 to 13 percent gross margins; 4.5 to 5 percent after-tax profit margins; inventory turns of 9 to 12; and 36 to 40 days sales outstanding. * Cash earnings per share (EPS) is presented as supplemental information for illustrative purposes only and is not prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). It is intended to help investors understand the earnings impact of certain non-cash items, restructuring and impairment costs and other one-time and non-recurring charges, and zero-coupon convertible debt. The weighted average number of shares used to calculate cash EPS is based on the weighted average number of shares used to calculate diluted net income (loss) per share adjusted for the assumed conversion of all convertible debt into common stock, when not already presumed. About Solectron Solectron (http://www.solectron.com) provides a full range of global manufacturing and supply-chain management services to the world's premier high-tech electronics companies. Solectron's offerings include new-product design and introduction services, materials management, high-tech product manufacturing, and product warranty and end-of-life support. Solectron, the first two-time winner of the Malcolm Baldrige National Quality Award, has a full range of industry-leading capabilities on five continents. Its headquarters are in Milpitas, Calif. Safe Harbor This news release contains forward-looking statements regarding our outlook for the future, OEM outsourcing trends and our position in the industry. Our statements are based on current expectations, forecasts and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include the length and severity of the current economic downturn and our ability to manage customer demand through the downturn, the ability to effectively integrate recently completed and currently pending acquisitions including Shinei International, MCC/Sequel and the pending acquisition of C-MAC Industries, the impact of events occurring Sept. 11, 2001, risk of price fluctuation, reliance on major customers, the length and severity of the current economic slowdown in the electronics technology sector, fluctuations in operating results, changes in technology, competition, the ability to manage rapid growth, the ability to manage rapid declines in customer demand, the ability to manage business integration, risks associated with international sales and operations, interest rate risk, environmental regulations, market risk, segment risk, the ability to retain key personnel and intellectual property rights enforcement. For a further list and description of risks and uncertainties, see the reports filed by Solectron with the Securities and Exchange Commission, specifically forms 8-K, 10-Q, S-3, S-4 and 10-K. Solectron disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. CONTACT: Analysts, Thomas Alsborg, +1-408-956-6614 (U.S.), or thomasalsborg@ca.slr.com, or Media, Kevin Whalen, +1-408-956-6854 (U.S.), or kevinwwhalen@ca.slr.com, both of Solectron Corporation.