narrowed its loss and managed minor sequential revenue growth as it posted third-quarter earnings close to its lowered expectations.
For the third quarter the contract manufacturer lost $64.8 million, or 30 cents per share, on revenue of $1.6 billion compared with a loss of $91 million, or 40 cents per share, on revenue of $1.9 billion in the year-ago period. The company says it is encouraged by new customer activity and posted a 2% sequential revenue gain for the third quarter compared to its dismal 17% year-over-year decline.
On an adjusted basis, the company says it lost only $3.8 million, or 4 cents a share, when it backs out a variety of nonoperating activities such as goodwill amortization, gains and losses on financing activities and $49 million in restructuring charges. The company says this compares to pro forma earnings of $51 million, or 20 cents per share, in the year-ago period. These results were just shy of analysts' expectations of a 2-cent loss.
Going forward, the company expects to post an adjusted loss of between 1 cent and 9 cents per share on revenue of about $1.7 billion, on track for revenue but substantially below the 4 cents a share of earnings analysts had expected. Analysts had also expected the company to break even for the year on an adjusted basis, but this now appears highly unlikely given the new fourth-quarter guidance. Management said the company has a "ways to go on our profitability track."
The company has made several substantial moves over the past 12 months, including using $743 million to reduce its debt burden and its announced acquisition last week of
Manufacturers Services Ltd.
( MSV) in a deal valued just above $200 million. The stock has traded down more than 5% since announcing the deal.
The stock is up slightly for the year, but that's before the market absorbs this earnings report.
reported similarly lackluster earnings this morning and has seen its stock hammered down 5% in premarket action.
Celestica is trading at a price-to-earnings ratio of 42 times its expected 2004 earnings, compared with 42 for Flextronics, and 52 for
( SLR), which is not expected to turn a profit in 2004, is trading at 26 times its expected 2005 earnings.