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Plexus (PLXS) Q1 Earnings Beat, Revenues Miss Estimates
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Plexus Corp (PLXS - Free Report) reported first-quarter fiscal 2017 adjusted earnings of 82 cents per share, which beat the Zacks Consensus Estimate of 76 cents and grew 74.5% year over year. However, revenues of $635 million, despite 3% growth year over year, fell short of the Zacks Consensus Estimate of $649.2 million.
Continued weakness in the Communications sector was a major factor. Shares were down 3% in the aftermarket session.
Revenues from the Communications sector (20.6% of total revenue) plummeted 16.6% year over year to $131 million.
Healthcare/Life Sciences (33.2%) revenues were up 10.5% from the year-ago quarter to $211 million.
Industrial/Commercial (32.4%) revenues increased 19.1% year over year to $206 million.
Defense/Security/Aerospace segment (13.7%) revenues fell 9.4% on a year-over-year basis to $87 million.
During the quarter, the company won 51 manufacturing solutions programs for which it anticipates approximately $217 million in annualized revenues once production commences.
Region-wise, the company’s revenues from both Americas and Asia Pacific increased 3.3% on a year-over-year basis. Nonetheless, Plexus’ revenues from Europe, Middle East, and Africa regions were almost down 7.1% year over year to $39 million.
Margins
Plexus reported adjusted operating profit of $33.9 million in the quarter, up 47.2% year over year. Adjusted operating margin increased 160 basis points year over year to 5.3%.
Balance Sheet & Cash Flow
Plexus exited the fiscal with cash & cash equivalents worth $496.5 million compared with $432.9 million as of Oct 31, 2016. The company had long-term debt and capital lease obligations of about $184.1 million compared with $184 million as of Oct 31, 2016.
For the quarter, the company generated $79.5 million in cash flow from operations in the quarter and used $7 million for capital expenditures. Free cash flow came in at about $72.5 million. Share repurchases for the quarter amounted to $7 million.
Outlook
For the second quarter of fiscal 2017, revenues are projected in a range of $620 million - $650 million. GAAP earnings are projected within 71 to 79 cents per share.
Our Take
We believe new program wins along with global expansion will drive growth over the long term. Plexus had earlier mentioned that it remains confident of achieving $3 billion revenue run rate in fiscal 2017. Additionally, the consolidation of the company’s production facilities in low-cost areas is expected to boost margins, going forward.
However, a mature electronic manufacturing services market and intense competition from the likes of Jabil Circuit (JBL - Free Report) , Celestica Inc. (CLS - Free Report) and Flextronics (FLEX - Free Report) remain headwinds. Additionally, the company expects weakness in the Communications market to impact the business in the near term.
Over the past one year, shares have increased 81.17% compared with the Zacks categorized Electronic Manufacturing Services (EMC) industry's gain of 52.48%.
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Plexus (PLXS) Q1 Earnings Beat, Revenues Miss Estimates
Plexus Corp (PLXS - Free Report) reported first-quarter fiscal 2017 adjusted earnings of 82 cents per share, which beat the Zacks Consensus Estimate of 76 cents and grew 74.5% year over year. However, revenues of $635 million, despite 3% growth year over year, fell short of the Zacks Consensus Estimate of $649.2 million.
Continued weakness in the Communications sector was a major factor. Shares were down 3% in the aftermarket session.
Revenues from the Communications sector (20.6% of total revenue) plummeted 16.6% year over year to $131 million.
Healthcare/Life Sciences (33.2%) revenues were up 10.5% from the year-ago quarter to $211 million.
Industrial/Commercial (32.4%) revenues increased 19.1% year over year to $206 million.
Defense/Security/Aerospace segment (13.7%) revenues fell 9.4% on a year-over-year basis to $87 million.
Plexus Corp. Price, Consensus and EPS Surprise
Plexus Corp. Price, Consensus and EPS Surprise | Plexus Corp. Quote
During the quarter, the company won 51 manufacturing solutions programs for which it anticipates approximately $217 million in annualized revenues once production commences.
Region-wise, the company’s revenues from both Americas and Asia Pacific increased 3.3% on a year-over-year basis. Nonetheless, Plexus’ revenues from Europe, Middle East, and Africa regions were almost down 7.1% year over year to $39 million.
Margins
Plexus reported adjusted operating profit of $33.9 million in the quarter, up 47.2% year over year. Adjusted operating margin increased 160 basis points year over year to 5.3%.
Balance Sheet & Cash Flow
Plexus exited the fiscal with cash & cash equivalents worth $496.5 million compared with $432.9 million as of Oct 31, 2016. The company had long-term debt and capital lease obligations of about $184.1 million compared with $184 million as of Oct 31, 2016.
For the quarter, the company generated $79.5 million in cash flow from operations in the quarter and used $7 million for capital expenditures. Free cash flow came in at about $72.5 million. Share repurchases for the quarter amounted to $7 million.
Outlook
For the second quarter of fiscal 2017, revenues are projected in a range of $620 million - $650 million. GAAP earnings are projected within 71 to 79 cents per share.
Our Take
We believe new program wins along with global expansion will drive growth over the long term. Plexus had earlier mentioned that it remains confident of achieving $3 billion revenue run rate in fiscal 2017. Additionally, the consolidation of the company’s production facilities in low-cost areas is expected to boost margins, going forward.
However, a mature electronic manufacturing services market and intense competition from the likes of Jabil Circuit (JBL - Free Report) , Celestica Inc. (CLS - Free Report) and Flextronics (FLEX - Free Report) remain headwinds. Additionally, the company expects weakness in the Communications market to impact the business in the near term.
Over the past one year, shares have increased 81.17% compared with the Zacks categorized Electronic Manufacturing Services (EMC) industry's gain of 52.48%.
Currently, Plexus has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>