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Celestica shares jump 13% on better-than-expected Q2 results

Published: 19:31 22 Jul 2011 BST

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Celestica (NYSE:CLS) (TSE:CLS) reported Friday that second quarter profit more than tripled as revenues rose 15% and margins expanded, beating analyst estimates.

For the three months ending June 30, the the Toronto-based electronics manufacturing services provider reported net income of $45.7 million, or 21 cents per share, compared to $13.0 million, or 6 cents per share, a year earlier.

Adjusted for a 6 cent charge, including restructuring costs and other items, net earnings were 27 cents per share, versus 22 cents in the second quarter of 2010.

Revenue for the quarter was $1.83 billion, compared to $1.59 billion a year ago.

Average estimates were for earnings of 24 cents a share on revenue of $1.80 billion, according to Thomson Reuters.

"Celestica had strong financial results in the second quarter as we delivered robust margin expansion and we achieved 15% year-over-year revenue growth," said president and CEO, Craig Muhlhauser.

"New business awards from 2010 are contributing to our revenue growth and operating margins are benefiting from a favorable revenue mix and higher operating efficiencies from recently ramped programs."

The consumer unit remained steady in terms of percentage of total revenue, at 26%, being the biggest top line contributer. Enterprise communications made up the second largest amount of sales, taking up 25%.

Adjusted operating margin was 3.7%, compared to 3.6% in the prior year period.

Looking ahead, the company said it anticipates revenue in the range of $1.725 to $1.875 billion in the third quarter, on adjusted earnings of between 23 cents and 29 cents per share - in line with views.

"We anticipate the current global economic environment will drive continued volatility in customer demand. Despite this environment, Celestica remains focused on providing industry-leading flexibility and operational performance to support our customers' success and delivering on our 2011 revenue growth, operating margin and ROIC targets," added Mulhauser.

Shares of the company were up 12% at $9.01 as of 2:01pm EDT.

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