NEW YORK, July 31, 2015 /PRNewswire/ --
ACI Association has initiated research coverage on Celestica Inc. (NYSE: CLS). Select highlights from the internally released reports are being made available to the general public (included below), with access to the entirety of the research available to new members.
Today, membership is open to readers on a complementary basis at the following URL: http://www.aciassociation.com/?c=CLS
Highlights from our CLS Report include:
- Earnings Meet Guidance - On July 23, 2015, Celestica announced its financial results for the second quarter of 2015. The Company reported Q2 revenues of $1.42 billion which was above the mid-point of the Company's guidance range of $1.35 billion to $1.45 billion, driven primarily by strong demand in the Company's communication, storage and semiconductor end-markets. The revenues were up 9% sequentially, whereas they decreased 4% on a Y-o-Y basis. The Company generated adjusted earnings of 25 cents per share, thereby surpassing the midpoint of its guidance range by 2 cents. The adjusted EPS remained unchanged from the prior year quarter.
Segmental Results - The Company's Communications end market contributed 40% of the total revenue earned during the quarter. The Communications revenue grew 9% on a Q-o-Q basis due to strong demand as well as new program ramps. Celestica's Diversified end markets made up 28% of the Company's second quarter revenue. Revenue from this segment grew 7% sequentially on the back of growth in aerospace and defense and semiconductor. Revenue from the Company's storage end market was higher than expected and accounted for 19% of revenues of Q2. Storage revenues grew 17% on a sequential basis due to seasonality in overall strong demand. Q2 revenues from the server end market, which represented about 10% of Q2 revenues, were relatively flat sequentially. Additionally, consumer end market representing 3% of total Q2 revenue increased 14% on sequential basis.
- Operational Updates -The Company announced that it entered into an agreement for the sale of its corporate headquarters and manufacturing operations located in Toronto, Ontario to an entity to be formed by a consortium of three real estate developers. The transaction, with an agreed purchase price is approximately CAD137 million, is expected to be completed within approximately two years. Further, during the reported quarter, the Company repurchased and cancelled 26.3 million subordinate voting shares for $350.0 million.
- Outlook- Celestica is projecting revenues to range from $1.4 billion to $1.5 billion for the third quarter. The Company expects operating margin of approximately 3.6% at the mid-point of its revenue guidance. Q3's adjusted earnings are expected to range from $0.28 to $0.34 per share.
To find out how this influences our rating on Celestica Inc. read the full report in its entirely here: http://www.aciassociation.com/?c=CLS
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