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I would now like to turn the call over to Michael Clarke, Chief Executive Officer.

Michael Clarke -- Chief Executive Officer

Thank you, Paige, and good afternoon, everyone. Thank you for joining the call today. With me on the call is Dave Anderson, our CFO.

David Anderson -- Chief Financial Officer

Welcome everyone.

Michael Clarke -- Chief Executive Officer

Just a few comments on the quarter before I turn the call over to Dave. We are real pleased with the quarter and can see some of our operational efforts materializing. Congratulation and thank you to our team for their hard work, dedication and exceeding our expectations in this quarter.

Revenue came in above our outlook, primarily driven by the ability to catch up with demand and ramp of new programs. Non-GAAP earnings came in above our outlook at $0.91, delivering solid cash flow as we made positive strides to reduce inventory.

With that, I will now turn the call over to Dave to go through our financial results. Then I will provide more insight on the business and our end markets, followed by Q&A. Dave?

David Anderson -- Chief Financial Officer

Thanks Michael. Please turn to Slide 3. Overall, our second quarter revenue and non-GAAP diluted earnings per share exceeded our expectations. Revenue exceeded the high end of our outlook by $126.6 million ending at $2.13 billion. Revenue was down sequentially 2.8% and up 26.9% from the second quarter of last year. Our strong second quarter revenue was driven by our catching up to our customers' demand as supply continued to stabilize, as well as the ongoing ramp of new programs to volume production.

Non-GAAP diluted earnings per share at $0.91 exceeded the high end of our outlook by $0.11 and was up 9.1% sequentially and 81.1% over the second quarter of last year. I will discuss our end market revenue, non-GAAP margin and non-GAAP diluted earnings per share performance in more detail in a few minutes.

Please turn to Slide 4. From a GAAP perspective, we reported net income of $40.9 million, which resulted in diluted earnings per share of $0.57 for the second quarter. This was up $0.04 sequentially and $0.24 from Q2 of last year. The sequential improvement in GAAP diluted earnings per share was largely driven by an increase in gross profit resulting from operational improvements. The improvement over Q2 of last year resulted from higher gross profit, driven by the contribution margin flow-through on the increased revenue.

My remaining comments will focus on the non-GAAP financial results for the second quarter of fiscal 2019. At $155.1 million, gross profit was up $4 million from the prior quarter. Gross margin came in at 7.3%, which was 40 basis points higher than Q1.

Operating expenses were up sequentially, in line with our Q2 outlook, at $67.7 million. As a percentage of sales, operating expenses were up 20 basis points to 3.2%, but down 70 basis points from 3.9% in Q2 of last year. Operating expenses were up sequentially mainly due to lower billable customer engineering projects and higher labor and benefits costs that were partially offset by lower net incentive costs. Operating expenses continue to be one of our key operating levers, and we are focusing on continuing -- on containing operating expenses as a percent of sales.

Operating margin was 4.1%, which was up 20 basis points sequentially at the high end of our outlook and up 100 basis points compared to Q2 of last year. In Q2, we achieved our goal, which we mentioned during our last call, of getting our operating margins back to the 4% range as quickly as possible.

Other income and expense at $9 million was down $5.1 million when compared with last quarter and up $2 million from the second quarter of last year. OIE dropped sequentially largely due to a swing in deferred compensation assets. This has no net impact on non-GAAP diluted earnings per share as changes in deferred compensation are equally offset in gross profit and operating expenses.

Net interest expense was basically flat quarter-over-quarter. The tax rate for the quarter was 17% of pre-tax income, which was slightly better than our expectations of 17.5% as a result of a slightly more favorable geographic distribution of our profits.

We earned $65 million in net income with our non-GAAP diluted earnings per share coming in at $0.91, which was above the high end of our outlook for the second quarter. Non-GAAP diluted earnings per share were up $0.08 or 9.1% from Q1 and up $0.41 or 81.1% from Q2 of last year. This was based on 71.4 million shares outstanding on a fully diluted basis for Q2.

Please turn to Slide 5. I will now give you some color around our end-market segments for the second quarter. The second quarter continued our solid start to fiscal 2019 with better than expected revenue across each of our end markets. Communications networks was $760.9 million or 35.8% of Q2's total revenue. This was down 2.4% sequentially and up 18.5% year-over-year. Industrial, automotive, defense and medical was $1.16 billion or 54.7% of revenue for the quarter. This was down 1.7% on a sequential basis and up 35.1% compared to the same period a year ago. Revenue was up year-to-date across all four sub-segments.

Cloud solutions consists of cloud computing, storage systems, point-of-sale, casino gaming and set-top boxes. This segment was $203.2 million or 9.5% of revenue in the second quarter, down 10% sequentially and up 17.7% compared to the same period a year ago. While aggregate customer demand remained fairly stable, a key contributor to the better than expected Q2 end market revenue and yearly growth was the continued stabilization of component lead times and our team's ability to partner with our customers and suppliers to catch up on our customers' demand requirements.

Please turn to Slide 6. The Integrated Manufacturing Solutions segment represents printed circuit board assembly and test, final system assembly and test, as well as direct order fulfilment. As you can see from the graph on the left, the IMS segment revenue was flat with last quarter at $1.79 billion, which was higher than we expected. IMS gross margin was up 20 basis points to 6.4% compared to the prior quarter and was also better than expected. IMS gross profit margins came in better than expected, largely driven by the profit contribution flow-through on the better than expected revenue and the resolution of certain cost recoveries from our customers.

On the right is our second segment, Components, Products and Services. Components include printed circuit board fabrication, backplane assemblies, cable assemblies, enclosures, precision machining and plastic injection molding. Products include computing and storage products, defense and aerospace products, memory and SSD modules, as well as optical and RF modules. Services include design and engineering, as well as logistics and repair services.

In aggregate, the revenue for this segment was down sequentially by $60.8 million to $395 million with gross margin up 130 basis points from Q1, entering double-digit territory at 10.2% (ph). CPS segment gross margins improved sequentially across all the components, products and services sub-segments that was mainly driven by operational improvements in our components sub-segment.

Please turn to Slide 7. Here we are showing you the quarterly trend in our key non-GAAP P&L metrics. Revenue was down 2.8% from last quarter and up 26.9% over Q2 of last year to $2.13 billion. Gross profit increased 2.6% from last quarter to $155.1 million. Gross margin at 7.3% was up 40 basis points from last quarter. Our operating profit increased 1.9% from last quarter to $87.4 million, and this led to operating margin of 4.1%, a 20 basis point improvement compared to Q1.

In Q2, we achieved our goal, which we mentioned during our last call, of getting our operating margins back to the 4% range as quickly as possible.

Non-GAAP diluted earnings per share grew 9.1% sequentially to $0.91. The 9.1% sequential improvement resulted from operational improvements across our IMS and CPS segments that included catching up with demand requirements of our customers as lead times continued to stabilize.

Please turn to Slide 8. Our balance sheet remains strong. Our cash and cash equivalents were $405.5 million at the end of the quarter. Cash was down $3.8 million from the previous quarter, accounts receivable was down $31.6 million, contract assets were down $17.8 million, and inventory was down $47.6 million. We'll talk more about contract assets and inventory in a moment.

From a liability standpoint, we had a $92.5 million decrease in accounts payable during the quarter. Our short-term debt was down $65 million from last quarter to $643.4 million. Our short-term debt includes the $375 million notes due in June of 2019 that are classified as current on the balance sheet.

On April 5th, we entered into an amendment to our cash flow revolver to increase its size from $500 million to $700 million. The increase will be effective once we retire our 2019 senior secured notes. The retirements of these notes will happen on June 3rd, 2019, and we will be funded through -- and will be funded through the exercise of a delayed draw term loan that is available under our cash flow revolver. We also retained the right to seek commitments to increase the cash flow revolver by $200 million in the future. The revolving commitments under the amended cash flow revolver agreement, including the delayed draw term loan, expire and must be repaid on November 30th, 2023.

In conjunction with setting up of the delayed draw term loan, we have entered into forward interest rate swap agreements that effectively convert our variable interest rate obligations to fixed interest rate obligations through December 1st of 2023. Through March 30th, 2019, we had entered into interest rate swaps with an aggregate notional amount of $350 million that had an effective interest rate of approximately 4.3%.

We did not repurchase shares during the second quarter. We have approximately $101 million available under our Board authorized share repurchase plan that is subject to compliance with our debt covenants. As of the end of the quarter, we had no long-term debt and our gross leverage was approximately 1.7 based on our total debt. Overall, our balance sheet and capital structure remain in great shape.

Please turn to Slide 9. Here we are showing you the quarterly trend in our balance sheet metrics. Cash was consistent with prior quarters in the $400 million range. Cash flow from operations for the quarter was a positive $105.7 million. Net capital expenditures for the quarter were $35.2 million, which was down slightly from Q1 and below our expectations for the quarter. We ended the quarter with positive free cash flow of $70.5 million, which was above our expectations. Our cash generation for the second quarter was positively impacted by strong cash collections, coupled with our team's focus on reducing our inventory levels.

In the upper right quadrant, we are showing the trend in inventory turns and dollars with the first and second quarters of 2019 shown on the old versus new basis for comparative purposes. As I mentioned on last quarter's call, Sanmina adopted the new revenue recognition standard, commonly referred to as ASC 606, on a modified retrospective basis. As I previously indicated, we did not expect the adoption of ASC 606 to materially impact our revenue or earnings per share, which was again the case for our second quarter of 2019.

However, ASC 606 does have an impact on our balance sheet.

With the recording of revenue on an over time basis for the majority of our non-product revenue stream, we are required to reflect work-in-progress and finished goods inventory along with the profit element as contract assets, which is essentially unbilled receivables. As a result, at the end of Q2, we had $401.7 million of contract assets and $1 billion of inventories on the balance sheet. For comparative purposes, from an inventory turns perspective, we have provided the inventory turns calculation for Q1 and Q2 under the old and new methodologies. We made some progress in reducing our inventory during Q2. Our inventory dollars under the old methodology were down $56 million sequentially to $1.39 billion and our turns were 5.5 times.

Inventory continues to be a challenge, largely driven by ongoing material shortages on certain commodities such as resistors, capacitors and discrete semiconductors. While we saw continued stabilization of lead times during Q2, lead times are still extended compared to a normal market. As we indicated on our last call, we still anticipate that the supply environment will remain constrained, particularly on legacy technology commodities, at least through the remainder of calendar 2019.

We continue to work with our customers to better understand the demand outlook so that we can plan for the requirements with our suppliers. Our supply chain organization has done a good job partnering with our customers and suppliers to secure constrained parts to help catch up with our customers' demand requirements, which was instrumental in our ability to ship $126.6 million above the high end of our guidance. We will continue to work with our customers and suppliers to maximize the fulfillment of our customers' demand, while also working on addressing our inventory levels and the negative impact on our cash flow.

We also expect to continue to make improvements in our operational efficiencies and materials execution in the areas that we can control in spite of the supply constrained environment. In the lower left quadrant, we're showing cash cycle days, which combines our cycle time for inventory, contract assets, accounts receivable and accounts payable.

Overall, cash cycle time was up sequentially to 52.5 days, largely driven by unfavorable customer payment terms mix.

Finally, pre-tax ROIC decreased by 1.1 percentage points to 23.1% from the prior quarter. Compared to the second quarter of last year, pre-tax ROIC improved 7.3 percentage points.

Please turn to Slide 10. I will now share with you our outlook for the third quarter of fiscal 2019. Our view is that revenue will be in the range of $1.925 billion to $2.025 billion. GAAP diluted earnings per share will be between $0.60 to $0.70. This includes estimated stock-based compensation expense of $0.12 per share. On a non-GAAP basis, we expect that gross margin will be in the range of 7.2% to 7.6%. Operating expense should be $67 million to $69 million. This leads to an operating margin in the range of 3.8% to 4.2%. We expect that other income and expense will be in the range of $11 million to $12 million. Our tax rate should be around 17.25%. And we expect our fully diluted share count to be around 71.5 million shares, plus or minus 0.5 million shares. When you consider all of this guidance, we believe that we will end up with non-GAAP earnings per share in the range of $0.72 to $0.82.

For your cash flow modeling, we expect that net capital expenditures will be around $40 million, while depreciation and amortization will be around $30 million. We expect net capital expenditures for 2019 fiscal year to be in the range of $120 million to $130 million. We expect to generate positive cash flow from operations in Q3 as we continue to drive better materials planning and execution partnering with our customers in the supply constrained environment that is expected to lead to a reduction in our working capital.

Overall, we delivered solid results in the second quarter of fiscal 2019. Our revenue exceeded our outlook. We were at the high end of our outlook in operating margins of 4.1%. And non-GAAP diluted earnings per share of $0.91 exceeded the top end of our outlook by $0.11. Our ability to control our costs, drive efficiencies, leverage our operating model and reduce our inventory levels drove our operating margins to 4.1%, our non-GAAP diluted earnings per share to $0.91 and free cash flow to $70.5 million.

We don't typically provide full year guidance. However, given the continuing supply constrained environment and our solid results over the first half of fiscal 2019, some of which was driven by our catching up with our customers' demand, we feel it is important to provide you with our view on fiscal 2019's full year sales growth. Based on our current pipeline and assuming continued growth in the global economy, we are cautiously optimistic that fiscal 2019 revenue will grow in the mid-teens. We will continue to focus on our operational execution, productivity and cost structure that will leverage our operating model and help further expand our operating margins, earnings and free cash flow.

I will now turn the call over to Michael to further comment on our outlook for fiscal 2019.

Michael Clarke -- Chief Executive Officer

Thanks Dave. Thank you. Dave provided comments about our overall outlook for the Company. Now, I would like to provide you with additional color on the end market outlook for the third quarter and FY19.

The communications networks is made up of wireless network and optical products. We continue to see strong demand in the communications market, gaining tractions in such programs as 5G, IP LIDAR (ph) that we're working on. The 5G market is exciting for us. As it matures and the products move from NPI to volume production, Sanmina will benefit from this going forward. We expect third quarter to be down sequentially as we have caught up with demand that helped drive first half results. However, we expect our growth for the full year to be great, incidentally the strongest we've seen in a long time.

Industrial, defense, medical and automotive: while this segment was slightly down for the second quarter, it did better than expected with all sub-segments up year-to-date and solid growth in automotive. We continue to benefit from progress we've made and won and continue to win that will support our growth in markets in the future. Our customers recognize our capabilities more so now and the value-add that we offer. We are well positioned in the market for the long term. Based on the forecast from our customers, we expect our third quarter to be down sequentially but up over the prior quarter last year. And as like with the communications, we expect nice growth for the full year.

Cloud solutions: based on the forecast, we foresee the cloud solutions segment to be down sequentially for the third quarter and flat for the full year.

We are really excited about the opportunities ahead of us in all segments and sub-segments with most of them up for the full year. We have a healthy pipeline, driven by a great and strong customer base, the continuous improvements we are making in operations and new program wins.

In summary, Q2 was another solid quarter. We continued to improve our operational margins. We have a healthy pipeline going into the second half of the year. We remain confident in our ability to drive profitable growth and positive cash flow from operations over the remaining (ph) of fiscal year '19. Our third quarter outlook: revenue at $1.925 billion to 2.025 billion and non-GAAP EPS of $0.72 to $0.82. Based on our results for the first half and our outlook for the third quarter, we expect for the full year to be in the mid-teens based on continuous growth in the global economy.

I sincerely thank our employees worldwide for their hard work and dedication, to our customers for their support -- without them, we would not be here -- and to our shareholders for their continuous confidence in Sanmina.

With that, operator, I would now like to open the call up for questions.

Questions and Answers:

Operator

(Operator Instructions) And your first question comes from Jim Suva.

David Anderson -- Chief Financial Officer

Hi, Jim.

Michael Clarke -- Chief Executive Officer

Jim?

Tim Yang -- Citigroup -- Analyst

Sorry, I was on mute. Hey, this is Tim Yang calling on behalf of Jim Suva. Thanks for taking the question. And your communications segment had strong double-digit growth for the March quarter. Can you talk about how much is that driven by the optical strength or -- and how much is it driven by non-optical product? And then I have a follow-up.

Michael Clarke -- Chief Executive Officer

We don't usually split that up. But generally speaking, when we look at the communications market, it's made up of, like for example, the 5G. It's also made up of the optical as well as the IP network. But we experienced growth in all of those areas.

Tim Yang -- Citigroup -- Analyst

A couple of your peer EMS (ph) companies mentioned that they have seen some softness in router and switches products. So I wonder if you are seeing the similar thing or what you're seeing in the marketplace is different?

Michael Clarke -- Chief Executive Officer

No. No, we're not exactly seeing that as we are now.

Tim Yang -- Citigroup -- Analyst

Got it. And then...

David Anderson -- Chief Financial Officer

Sorry, go ahead. Yeah, so...

Tim Yang -- Citigroup -- Analyst

Yeah, please go head.

David Anderson -- Chief Financial Officer

Yeah, like Michael said, we aren't right now seeing that in terms of the routing and networking piece. So we're not quite sure what you're coming on about our competitors.

Tim Yang -- Citigroup -- Analyst

Got you. And then my last question is on your revenue seasonality. It appears that your June quarter guidance is a little bit below seasonal. So how should we think about the seasonality for -- going forward, especially for the next year as well? Thank you.

David Anderson -- Chief Financial Officer

Yeah, we didn't really talk about that in terms of seasonality. What we're really seeing, as we talked about just through the early part of this call, is that continuing through Q2, we kept seeing good catch-up in the demand requirements of our customers. So we are seeing for Q3, as we guided, as you can see, we're seeing a more -- not necessarily in relation to seasonality as, per se, just that we have in the first half of the year caught up with the demand of our customers.

Tim Yang -- Citigroup -- Analyst

Got you. Thanks for the color.

David Anderson -- Chief Financial Officer

Thanks Tim.

Michael Clarke -- Chief Executive Officer

Thanks Tim.

Operator

And our next question is from Christian Schwab.

Christian Schwab -- Craig-Hallum -- Analyst

Great, thanks for taking my question. And just on the last question by the gentleman before, he was kind of talking about seasonality and he also kind of mentioned on a yearly basis which is -- which I think you guys failed (ph) to answer, so I'll give you a chance to do that quick if you guys want to talk about a multi-year kind of growth rate or what we should be thinking about growth rates going into 2020.

David Anderson -- Chief Financial Officer

Yeah, Chris, we don't -- we aren't -- you know this, we aren't giving out growth rates beyond what we've done for the full year 2019, so we're not going to talk about 2020 at this point. But what we did say and what I guess I just answered to Tim was that our -- what we saw in the first -- so far in the first half of the year has been the catch-up of the demand because of the supply constrained environment, and that flowing through to the full year, we're cautiously optimistic, as we said, that the growth rate for the full year will be in the mid-teens.

Christian Schwab -- Craig-Hallum -- Analyst

Okay. That's fantastic. Can you talk about structurally what you guys did or what you did coming in potentially to improve the gross margins in the Components, Products and Services business so dramatically over a two-quarter time frame?

Michael Clarke -- Chief Executive Officer

Well, I don't know whether it was dramatically an improvement. The Company is a solid company. We have a solid infrastructure. We just kept focusing on the light parts of the business that focus -- that can change the needle. We went -- when you start looking at the supply issue, we've got a real strong organization that I think the momentum was building up to be able to get the supply constraints sorted out. We also booked a lot of new programs over the past year or so and focused on them to get them full prototypes, get the yields up. If I could say this, it's just like basically blocking and tackling. We got all the bells and whistles in the Company. I just kept focusing on the things that can change the needle.

Christian Schwab -- Craig-Hallum -- Analyst

Great. And then -- thank you for that. My last question has to do with operating margins. When you first came in, you said, we're going to drive the Company as fast as possible to the 4% plus operating margin range, and then in your slides here, we're still focused on operating margin improvement. After you've now had a chance to be there for a few quarters, are you prepared to kind of give a multi-year objective of what you think this business can drive above 4% on an operating margin basis or not quite yet?

Michael Clarke -- Chief Executive Officer

Probably not quite yet. But obviously, we are not satisfied with where we are, and we've been -- we've had operating margins right in there in the past, and that's where we're going to focus. But I'm not prepared at this time, but you and a lot of other investors can be assured, that's a big focus for us going forward.

David Anderson -- Chief Financial Officer

Yeah. I think, Christian, just add to that, as you know, we've been heavily focused on improving the operational efficiencies as we've been in this supply constrained environment, and we are trying to get the leverage out of our model which we've shown you in the past. So we're -- our first goal was to get to that 4%, and obviously, we're trying to get to continue to improve on that going forward.

Christian Schwab -- Craig-Hallum -- Analyst

Great. No other questions. Thank you.

Michael Clarke -- Chief Executive Officer

You're welcome. Thanks.

Operator

(Operator Instructions)

Michael Clarke -- Chief Executive Officer

Operator, we have time for one more question, I guess.

Operator

And there are no further questions at this time.

Michael Clarke -- Chief Executive Officer

Okay. In closing, I'd just like to comment again, look, Sanmina has a strong foundation. We've got good results this past couple of quarters. We've got an experienced talented employee base, solid customer base with great target markets, leading technologies, global footprint. We are well positioned for the future in the Company. So I thank all of you for joining the call today and we look forward to providing you an update on the business on our next earnings call. Thank you very much.

David Anderson -- Chief Financial Officer

Thank you.

Operator

Thank you. And this does conclude today's conference call. You may now disconnect.

Duration: 34 minutes

Call participants:

Paige Bombino -- Vice President of Investors Relations

Michael Clarke -- Chief Executive Officer

David Anderson -- Chief Financial Officer

Tim Yang -- Citigroup -- Analyst

Christian Schwab -- Craig-Hallum -- Analyst

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