Sky Falling at Celestica

Celestica (CLS Quote - Cramer on CLS - Stock Picks) plunged 22% Wednesday after the contract electronics manufacturer forecast a surprise first-quarter loss and announced the departure of its financial chief.

The Toronto-based outsourcer lost $61 million, or 27 cents a share, for the quarter ended Dec. 31, compared with a year-ago loss of $28 million, or 12 cents a share. Excluding certain costs, adjusted earnings fell to 3 cents a share from 13 cents a year earlier.

Revenue rose 9% from a year ago to $2.26 billion.

Analysts surveyed by Thomson Financial were looking for a 4-cent adjusted profit on sales of $2.27 billion.

"While revenues for the fourth quarter came in above the high-end of the updated guidance, our financial results were extremely disappointing," CEO Craig Muhlhauser said. "The year to year growth in the consumer segment was offset by higher than expected demand reductions from several key customers in the telecommunications segment. This demand reduction along with the impact of the inventory provision taken in Mexico significantly impacted operating margins."

Celestica is the biggest manufacturing partner of struggling French telco supplier Alcatel-Lucent (ALU Quote - Cramer on ALU - Stock Picks), which warned last week of weak sales.

The company said it will cut costs and recognize some $60 million to $80 million of restructuring charges, $40 million of which have been recorded in the fourth quarter.

Celestica said finance chief Tony Puppi will retire.

"Tony is one of Celestica's founding executives and he has provided strong leadership and dedication to the company over the course of his career," Muhlhauser said. "I am pleased that Tony will continue to provide his support for the successful transition to a new CFO and I wish him the very best in the years ahead."

« Previous Page

1 2

Next Page »