Plexus ( PLXS Quick Quote PLXS - Free Report) recently announced that it will be unable to meet its previously provided (Apr 21) fiscal third-quarter revenue guidance of $875 to $915 million and GAAP earnings outlook of $1.23 to $1.38 per share. The announcement came following the latest restrictions imposed by the Malaysian government to combat coronavirus pandemic. Notably, Malaysian government has mandated a two-week workforce curtailment for manufacturers in the region. Since Plexus has been streamlining its manufacturing facilities and expanding to these low-cost regions lately, these restrictions are expected to affect its operations. Plexus is still trying to determine the financial impact due to the uncertain situation created by the Malaysian restrictions. Markedly, the Zacks Consensus Estimate for third-quarter earnings is pegged at $1.29 per share, stable over the past 30 days. The figure indicates an improvement of 7.5% from the year-ago quarter.
Moreover, the consensus mark for revenues stands at $893.6 million, suggesting growth of 4.2% from the prior-year reported figure.
Malaysian Restrictions to Hurt Prospects
Plexus generates significant portion of its net sales from Malaysia. The country accounted for around 42% of net sales in fiscal 2020 compared with 36% in fiscal 2019.
Moreover, revenues from Malaysia increased 25.8% year over year to $1.43 billion in fiscal 2020 despite government mandated restrictions to curb COVID-19 spread that affected Plexus' operations. The company has been trying to mitigate the effects of COVID-19 on its productivity by making adjustments in its shift patterns, flexible work arrangements, productivity improvements and facility enhancements to support social distancing. However, resurgence of COVID-19 and the uncertainty stemming from the Malaysian restrictions are expected to hurt top-line prospects. Nevertheless, Plexus is anticipated to benefit from the healthy number of program wins. In first-quarter fiscal 2021, the company won 35 new manufacturing programs worth approximately $223 million in annualized revenues. It added more than $1 billion in annualized revenues in the trailing four quarters from new program wins. Zacks Rank & Other Stocks to Consider
Currently, Plexus carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology sector include Alphabet ( GOOGL Quick Quote GOOGL - Free Report) , Lam Research ( LRCX Quick Quote LRCX - Free Report) and Cambium Networks ( CMBM Quick Quote CMBM - Free Report) . Each of the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Long-term earnings growth for Alphabet, Lam Research and Cambium Networks are pegged at 18.1%, 32.8% and 20%, respectively. +1,500% Growth: One of 2021’s Most Exciting Investment Opportunities
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