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Plexus (PLXS) Q3 Earnings and Revenues Surpass Estimates

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Plexus Corp (PLXS - Free Report) reported third-quarter fiscal 2022 adjusted earnings of $1.33 per share, which surged 34% year over year. The Zacks Consensus Estimate stood at $1.10 per share.

Revenues of $981 million topped the consensus mark by 8.2% and increased 20.5% year over year. The top-line performance gained from an improving demand environment and new program ramps amid global supply chain disruptions.

In the reported quarter, Asia-Pacific revenues rose 31%, while that from Europe and the Middle East and Africa and the Americas increased 10.5% and 7.5%, respectively.

During the quarter, Plexus won 47 manufacturing contracts during the quarter, worth $201 million in annualized revenues when fully ramped into production. Trailing four-quarter manufacturing wins totaled more than $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 were up 22% year over year to $454 million, contributing 46% to total revenues.

Healthcare/Life Sciences revenues jumped 24% from the year-ago quarter’s levels to $401 million. The segment contributed 41% to total revenues.

Aerospace/Defense revenues increased 6.8% year over year to $126 million, contributing 13% to total revenues.

The top 10 customers of the company accounted for 56% of net revenues.

Operating Details

Gross profit on a GAAP basis increased 26.4% year over year to $93.6 million. The gross margin expanded 40 basis points (bps) to 9.5%.

Selling and administrative expenses (4.5% of revenues) increased 20.9% from the year-ago quarter to $44.1 million.

Plexus reported an adjusted operating income of $49.6 million, up 31.8% year over year. Adjusted operating margin expanded 50 bps to 5.1%.

Balance Sheet & Cash Flow

As of Jul 2, 2022, Plexus had cash & cash equivalents worth $276.6 million compared with $307.9 million as of Apr 2, 2022.

As of Jul 2, 2022, the company had long-term debt and finance lease obligations, net of the current portion of $184.7 million compared with $186.1 million as of Apr 2, 2022.

In the quarter under review, the cash flow provided by operations was $21.2 million. The company reported a free cash outflow of $42 million. The company repurchased 11.7 million shares at an average price of $79.27 per share. With this bulk of repurchases, Plexus completed the $50 million share repurchase program authorized by the board of directors on Aug 11, 2021

Guidance

For fourth-quarter fiscal 2022, revenues are projected between $980 million and $1.020 billion.

GAAP operating margin is expected to be between 4.7% and 5.2%. GAAP earnings are expected in the range of $1.19-$1.35 per share, including 22 cents of stock-based compensation expenses.

Zacks Rank & Stocks to Consider

Plexus currently has a Zacks Rank #3 (Hold).

Some other top-ranked stocks from the broader technology sector worth consideration are Synopsys (SNPS - Free Report) , Aspen Technology (AZPN - Free Report) and Badger Meter (BMI - Free Report) . BMI sports a Zacks Rank #1 (Strong Buy) while Synopsys and Aspen carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for BMI’s 2022 earnings is pegged at $2.30 per share, up 7% in the past 60 days. Badger Meter’s earnings beat the Zacks Consensus Estimate in three of  the preceding four quarters, with the average being 12.6%. Shares of BMI have lost 8.7% of their value in the past year.

The Zacks Consensus Estimate for Synopsys 2022 earnings is pegged at $8.67 per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 19.6%.

Synopsys earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 2.7%. Shares of SNPS have increased 23.8% in the past year.

The Zacks Consensus Estimate for Aspen’s fiscal 2022 earnings is pegged at $5.49 per share, rising 0.4% in the past 60 days. The long-term earnings growth rate is anticipated to be 16.3%.

Aspen’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 4%. Shares of AZPN have grown 34.8% in the past year.

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