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Plexus (PLXS) Q1 Earnings Beat Estimates, Revenues Down Y/Y

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Plexus (PLXS - Free Report) reported first-quarter fiscal 2021 adjusted earnings of $1.23 per share that beat the Zacks Consensus Estimate by 10.8%. Moreover, the figure grew 23% year over year.

Revenues of $830.4 million beat the consensus mark by 0.02%. However, the figure decreased 2.6% year over year due to lower Americas and Europe, and the Middle East and Africa (EMEA) revenues, which fully offset steady performance in the Asia-Pacific (APAC).

APAC revenues were flat year over year at $451 million. However, EMEA revenues were $79 million, down 7.1%. Moreover, revenues in the Americas declined 7.4% to $327 million.

Plexus won 35 manufacturing contracts during the quarter, worth $223 million in annualized revenues. Trailing four-quarter manufacturing wins totaled $1 billion in annualized revenues.

Plexus Corp. Price, Consensus and EPS Surprise

Plexus Corp. Price, Consensus and EPS Surprise

Plexus Corp. price-consensus-eps-surprise-chart | Plexus Corp. Quote

Market Sector Details

Industrial revenues grew 2.7% year over year to $378 million and accounted for 45.5% of total revenues. Beginning first-quarter fiscal 2021, Plexus consolidated the previously reported Industrial/Commercial and Communications market sectors to form the Industrial market sector.

Healthcare/Life Sciences revenues climbed 2.2% from the year-ago quarter to $319 million. The sector accounted for 38.4% of total revenues.

However, Aerospace/Defense revenues decreased 22.7% year over year to $133 million and accounted for 16% of total revenues.

Notably, the top 10 customers of the company accounted for 55% of net revenues.

Operating Details

Gross profit on a GAAP basis increased 0.1% year over year to $79.3 million. Gross margin expanded 30 basis points (bps) year over year to 9.5%.

Selling and administrative expenses (3.9% of revenues) decreased 17.4% from the year-ago quarter to $32.4 million.

Plexus reported adjusted operating income of $46.9 million, up 17.4% year over year. Adjusted operating margin expanded 100 bps on a year-over-year basis to 5.6%

Balance Sheet & Cash Flow

As of Jan 2, 2021, Plexus had cash & cash equivalents worth $356.9 million compared with $385.8 million as of Oct 3, 2020.

Moreover, as of Jan 2, 2021, the company had long-term debt of $188.1 million compared with $188 million as of Oct 3, 2020.

In first-quarter fiscal 2021, cash flow provided by operations was $6.7 million. The company reported free cash outflow of $9.2 million.

ROIC (tax-effected annualized adjusted operating income divided by average invested capital over two quarters) was 16.3% for first-quarter fiscal 2021, which was much higher than Plexus’ weighted average cost of capital of 8.1%.

Guidance

For second-quarter fiscal 2021, revenues are projected between $860 million and $900 million. GAAP operating margin is expected between 5% and 5.5%.

GAAP earnings are expected between $1.17 and $1.32 per share.

The Zacks Consensus Estimate for first-quarter earnings is pegged at $1.02 per share, implying 67.2% growth from the figure reported in the year-ago quarter. The consensus mark for revenues stands at $831.2 million, suggesting growth of 8.3% from the year-ago quarter’s reported figure.

Zacks Rank & Stocks to Consider

Plexus currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector are Apple (AAPL - Free Report) , Amphenol (APH - Free Report) and CACI International (CACI - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

All the three stocks are scheduled to report their quarterly results on Jan 27.

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