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Plexus (PLXS) Q2 Earnings Beat Estimates, Revenues Fall Y/Y
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Plexus (PLXS - Free Report) reported second-quarter fiscal 2020 adjusted earnings of 61 cents per share that beat the Zacks Consensus Estimate by 13%. However, the figure declined 22.8% year over year.
Revenues of $767 million beat the consensus mark by 4.5%. However, the figure declined 2.8% year over year due to weakness in Communication and Healthcare/Life Sciences sectors and lower Americas (AMER) revenues.
Asia-Pacific (APAC) revenues increased 2.6% year over year to $388 million. However, Europe, the Middle East and Africa (EMEA) revenues declined 2.6% to $74 million and Americas revenues declined 8.2% to $334 million, respectively.
Plexus won 36 manufacturing contracts during the quarter, worth $248 million in annualized revenues. Trailing four-quarter manufacturing wins totaled $844 million in annualized revenues.
Market Sector Details
Industrial/Commercial revenues grew 14.8% year over year to $287 million and accounted for 37.4% of total revenues.
Aerospace/Defense revenues increased 12.1% year over year to $157 million and accounted for 20.5% of total revenues.
However, Healthcare/Life Sciences revenues declined 9.7% from the year-ago quarter to $271 million. The sector accounted for 35.3% of total revenues.
Communications accounted for 6.8% of total revenues. Revenues from the sector decreased 47.5% year over year to $52 million.
Notably, the top 10 customers of the company accounted for 56% of net revenues.
Operating Details
Gross profit declined 13% year over year to $61.4 million. Gross margin contracted 90 basis points (bps) year over year to 8%.
Selling and administrative expenses (5% of revenues) increased 2.1% from the year-ago quarter to approximately $38.2 million.
Plexus reported adjusted operating income of $23.2 million, down 30% year over year. Adjusted operating margin contracted 120 bps on a year-over-year basis to 3%.
Balance Sheet & Cash Flow
As of Apr 4, 2020, Plexus had cash & cash equivalents worth $225.8 million compared with $252.9 million as of Jan 4, 2020.
Moreover, as of Apr 4, 2020, the company had a long-term debt of $186.3 million compared with $186.8 million as of Jan 4, 2020.
In second-quarter fiscal 2020, cash flow used by operations was $29.3 million. The company reported negative free cash flow of $46.3 million.
Further, the company repurchased shares worth $13.2 million at an average price of $58.57 per share.
ROIC (tax-effected annualized adjusted operating income divided by average invested capital over two quarters) was 11.4% for second-quarter fiscal 2020. Plexus’ weighted average cost of capital for fiscal 2020 was 8.8%.
Guidance
For third-quarter fiscal 2020, revenues are projected between $790 million and $830 million.
Additionally, Plexus expects GAAP earnings between 72 cents and 82 cents per share.
Zacks Rank & Stocks to Consider
Plexus currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Avid Technology, Inc. , Netlist, Inc. (NLST - Free Report) and Garmin Ltd. (GRMN - Free Report) . While Avid Technology and Netlist sport a Zacks Rank #1 (Strong Buy), Garmin carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Avid, Netlist and Garmin is currently pegged at 20%, 15% and 7.35%, respectively.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Plexus (PLXS) Q2 Earnings Beat Estimates, Revenues Fall Y/Y
Plexus (PLXS - Free Report) reported second-quarter fiscal 2020 adjusted earnings of 61 cents per share that beat the Zacks Consensus Estimate by 13%. However, the figure declined 22.8% year over year.
Revenues of $767 million beat the consensus mark by 4.5%. However, the figure declined 2.8% year over year due to weakness in Communication and Healthcare/Life Sciences sectors and lower Americas (AMER) revenues.
Asia-Pacific (APAC) revenues increased 2.6% year over year to $388 million. However, Europe, the Middle East and Africa (EMEA) revenues declined 2.6% to $74 million and Americas revenues declined 8.2% to $334 million, respectively.
Plexus won 36 manufacturing contracts during the quarter, worth $248 million in annualized revenues. Trailing four-quarter manufacturing wins totaled $844 million in annualized revenues.
Market Sector Details
Industrial/Commercial revenues grew 14.8% year over year to $287 million and accounted for 37.4% of total revenues.
Aerospace/Defense revenues increased 12.1% year over year to $157 million and accounted for 20.5% of total revenues.
Plexus Corp. Price, Consensus and EPS Surprise
Plexus Corp. price-consensus-eps-surprise-chart | Plexus Corp. Quote
However, Healthcare/Life Sciences revenues declined 9.7% from the year-ago quarter to $271 million. The sector accounted for 35.3% of total revenues.
Communications accounted for 6.8% of total revenues. Revenues from the sector decreased 47.5% year over year to $52 million.
Notably, the top 10 customers of the company accounted for 56% of net revenues.
Operating Details
Gross profit declined 13% year over year to $61.4 million. Gross margin contracted 90 basis points (bps) year over year to 8%.
Selling and administrative expenses (5% of revenues) increased 2.1% from the year-ago quarter to approximately $38.2 million.
Plexus reported adjusted operating income of $23.2 million, down 30% year over year. Adjusted operating margin contracted 120 bps on a year-over-year basis to 3%.
Balance Sheet & Cash Flow
As of Apr 4, 2020, Plexus had cash & cash equivalents worth $225.8 million compared with $252.9 million as of Jan 4, 2020.
Moreover, as of Apr 4, 2020, the company had a long-term debt of $186.3 million compared with $186.8 million as of Jan 4, 2020.
In second-quarter fiscal 2020, cash flow used by operations was $29.3 million. The company reported negative free cash flow of $46.3 million.
Further, the company repurchased shares worth $13.2 million at an average price of $58.57 per share.
ROIC (tax-effected annualized adjusted operating income divided by average invested capital over two quarters) was 11.4% for second-quarter fiscal 2020. Plexus’ weighted average cost of capital for fiscal 2020 was 8.8%.
Guidance
For third-quarter fiscal 2020, revenues are projected between $790 million and $830 million.
Additionally, Plexus expects GAAP earnings between 72 cents and 82 cents per share.
Zacks Rank & Stocks to Consider
Plexus currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Avid Technology, Inc. , Netlist, Inc. (NLST - Free Report) and Garmin Ltd. (GRMN - Free Report) . While Avid Technology and Netlist sport a Zacks Rank #1 (Strong Buy), Garmin carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Avid, Netlist and Garmin is currently pegged at 20%, 15% and 7.35%, respectively.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>