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Why Is Plexus (PLXS) Up 2.5% Since Last Earnings Report?
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It has been about a month since the last earnings report for Plexus (PLXS - Free Report) . Shares have added about 2.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Plexus due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Plexus Q2 Earnings Top Estimates, Revenues Surge Y/Y
Plexus Corp reported second-quarter fiscal 2023 adjusted earnings of $1.45 per share, which surged 52.6% year over year. The Zacks Consensus Estimate was pegged at $1.16 per share.
Revenues of $1.071 billion increased 20.5% year over year. The top-line performance gained mainly from greater-than-expected Engineering and Sustaining Services performance amid persistent supply-chain troubles. Revenues beat the Zacks Consensus Estimate by 2.2%
In the reported quarter, revenues from Asia-Pacific, Europe, the Middle East and Africa, and the Americas rose 9.9%, 37.8% and 31.2%, respectively.
During the quarter, Plexus won 31 manufacturing contracts worth $275 million in annualized revenues when fully ramped into production. Trailing four-quarter manufacturing wins totaled more than $847 million in annualized revenues. Plexus also noted that funnel of qualified manufacturing opportunities now amounted to $4.2 billion, up $600 million from fiscal first quarter.
Market Sector Details
Industrial’s revenues were up 5.8% year over year to $439 million, contributing 41% to total revenues.
Healthcare/Life Sciences’ revenues jumped 38.2% from the year-ago quarter’s levels to $488 million, contributing 46% to total revenues.
Revenues from Aerospace/Defense increased 19% year over year to $144 million, contributing 13% to total revenues.
The top 10 customers of the company accounted for 51% of net revenues for fiscal second quarter.
Operating Details
Gross profit on a GAAP basis increased 34.6% year over year to $103 million. Gross margin expanded 100 basis points (bps) to 9.6%.
Selling and administrative expenses (4.3% of revenues) increased 13.2% from the year-ago quarter to $46.1 million.
PLXS reported an adjusted operating income of $56.9 million, up 58.9% year over year. Adjusted operating margin expanded 130 bps to 5.3%.
Balance Sheet & Cash Flow
As of Apr 1, Plexus had cash & cash equivalents worth $269.7 million compared with $247.9 million as of Dec 31, 2022.
As of Apr 1, PLXS had long-term debt and finance lease obligations, net of the current portion of $188.7 million compared with $187.3 million as of Dec 31, 2022.
In the quarter under review, the cash flow from operations was $106 million. Plexus reported a free cash flow of $79.6 million.
PLXS repurchased shares worth $12.4 million at an average price of $98.75 per share in the fiscal second quarter. It has shares worth $22.6 million left under its existing $50 million share repurchase authorization.
Guidance
For third-quarter fiscal 2023, revenues are projected to be between $1.00 billion and $1.05 billion.
Non-GAAP operating margin is expected to be between 4.5% and 5%. Non-GAAP earnings are expected in the range of $1.05-$1.23 per share, including 19 cents of stock-based compensation expenses, but excludes $0.29 in restructuring charges.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -17.09% due to these changes.
VGM Scores
At this time, Plexus has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Plexus has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Plexus (PLXS) Up 2.5% Since Last Earnings Report?
It has been about a month since the last earnings report for Plexus (PLXS - Free Report) . Shares have added about 2.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Plexus due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Plexus Q2 Earnings Top Estimates, Revenues Surge Y/Y
Plexus Corp reported second-quarter fiscal 2023 adjusted earnings of $1.45 per share, which surged 52.6% year over year. The Zacks Consensus Estimate was pegged at $1.16 per share.
Revenues of $1.071 billion increased 20.5% year over year. The top-line performance gained mainly from greater-than-expected Engineering and Sustaining Services performance amid persistent supply-chain troubles. Revenues beat the Zacks Consensus Estimate by 2.2%
In the reported quarter, revenues from Asia-Pacific, Europe, the Middle East and Africa, and the Americas rose 9.9%, 37.8% and 31.2%, respectively.
During the quarter, Plexus won 31 manufacturing contracts worth $275 million in annualized revenues when fully ramped into production. Trailing four-quarter manufacturing wins totaled more than $847 million in annualized revenues. Plexus also noted that funnel of qualified manufacturing opportunities now amounted to $4.2 billion, up $600 million from fiscal first quarter.
Market Sector Details
Industrial’s revenues were up 5.8% year over year to $439 million, contributing 41% to total revenues.
Healthcare/Life Sciences’ revenues jumped 38.2% from the year-ago quarter’s levels to $488 million, contributing 46% to total revenues.
Revenues from Aerospace/Defense increased 19% year over year to $144 million, contributing 13% to total revenues.
The top 10 customers of the company accounted for 51% of net revenues for fiscal second quarter.
Operating Details
Gross profit on a GAAP basis increased 34.6% year over year to $103 million. Gross margin expanded 100 basis points (bps) to 9.6%.
Selling and administrative expenses (4.3% of revenues) increased 13.2% from the year-ago quarter to $46.1 million.
PLXS reported an adjusted operating income of $56.9 million, up 58.9% year over year. Adjusted operating margin expanded 130 bps to 5.3%.
Balance Sheet & Cash Flow
As of Apr 1, Plexus had cash & cash equivalents worth $269.7 million compared with $247.9 million as of Dec 31, 2022.
As of Apr 1, PLXS had long-term debt and finance lease obligations, net of the current portion of $188.7 million compared with $187.3 million as of Dec 31, 2022.
In the quarter under review, the cash flow from operations was $106 million. Plexus reported a free cash flow of $79.6 million.
PLXS repurchased shares worth $12.4 million at an average price of $98.75 per share in the fiscal second quarter. It has shares worth $22.6 million left under its existing $50 million share repurchase authorization.
Guidance
For third-quarter fiscal 2023, revenues are projected to be between $1.00 billion and $1.05 billion.
Non-GAAP operating margin is expected to be between 4.5% and 5%. Non-GAAP earnings are expected in the range of $1.05-$1.23 per share, including 19 cents of stock-based compensation expenses, but excludes $0.29 in restructuring charges.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -17.09% due to these changes.
VGM Scores
At this time, Plexus has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Plexus has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.