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Plexus (PLXS) Likely to Miss Q1 Guidance on Supply Chain Woes

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Plexus Corp (PLXS - Free Report) recently announced that it would be unable to meet its previously-provided (Oct 27, 2021) first-quarter fiscal 2022 revenue guidance of $825-$865 million and GAAP earnings outlook of $1.01 to $1.17 per share. The company noted that performance has been affected by the unexpected supply chain disruptions, which deepened in the final weeks of the quarter.

Plexus CEO stated that the supplier delivery gaps in the Americas affected revenues, GAAP operating margin, GAAP earnings per share (EPS) and free cash flow metrics despite a strong demand environment. The company expects the supply chain troubles to continue in the near future.

Plexus now expects to report revenues between $815 million and $820 million for the fiscal first quarter. The company expects GAAP EPS in the range of 80-84 cents.  Both the metrics are inclusive of unexpected severance costs (nearly $2 million or 6 cents per share) related to a facility transition in Asia-Pacific. Plexus is slated to report fiscal first-quarter results on Jan 26, 2022.

For the second quarter of fiscal 2022, Plexus currently anticipates top-line growth on a sequential basis. However, the company added that GAAP EPS is unlikely to witness any major improvement due to higher costs incurred to support strong customer demand and a seasonal increment in compensation expenses.

For the second half of fiscal 2022, Plexus added that it expects to witness sequential growth in revenues and an expansion in profitability driven by strong demand projections. 

Plexus Corp. Price and Consensus

 

Plexus Corp. Price and Consensus

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

 

Plexus is a leading provider of electronic contract manufacturing services to original equipment manufacturers or OEMs in a wide range of industries, including networking/ communications, health care/life sciences, industrial/ commercial and defense/security/aerospace.

Plexus is well-positioned to benefit from the healthy number of program wins. In the last reported quarter, the company won 38 manufacturing contracts worth $251 million in annualized revenues. Trailing four-quarter manufacturing wins totaled more than $1.03 billion in annualized revenues.

Zacks Rank & Stocks to Consider

At present, Plexus carries a Zacks Rank #3 (Hold).

A few better-ranked stocks from the broader technology sector include Salesforce (CRM - Free Report) , Hewlett Packard (HPE - Free Report) and Microsoft (MSFT - Free Report) . While Salesforce and Hewlett Packard sport a Zacks Rank #1 (Strong Buy), Microsoft carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Salesforce’s fiscal 2022 earnings is pegged at $4.68 per share, up 6.4% in the past 60 days. The long-term earnings growth rate of the company is pegged at 16.8%.

Salesforce’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 44.2%. Shares of CRM have increased 1.2% in the past year.

The Zacks Consensus Estimate for Hewlett Packard’s fiscal 2022 earnings is pegged at $2.03 per share, unchanged in the past 60 days. The long-term earnings growth rate of the company is pegged at 5.8%.

Hewlett Packard’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 14.4%. Shares of HPE have rallied 40.4% in the past year.

The Zacks Consensus Estimate for Microsoft’s fiscal 2022 earnings is pegged at $9.13 per share. The long-term earnings growth rate of the company is pegged at 12%.

Microsoft’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 14.8%. Shares of MSFT have surged 34.9% in the past year.