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Celestica Inc. has announced its financial results for the third quarter ended September 30, 2016.
Revenue reached $1.55 billion—at the high end of the company’s previously provided guidance range of $1.475 to $1.575 billion—an increase of 5% sequentially and 10% compared to the third quarter of 2015.
Revenue from its diversified end market grew 9% compared to the third quarter of 2015, and represented 30% of total revenue for the third quarter of 2015 and 2016.
“Celestica delivered 10% year-over-year revenue growth in the third quarter with adjusted operating margin above the mid-point of our guidance,” said Rob Mionis, Celestica’s president and CEO. “We also achieved our fourth straight quarter of year-over-year revenue growth, and generated $100 million of free cash flow with year-over-year improvements in return on invested capital and earnings per share.”
“Our continued momentum in driving revenue and earnings growth in a dynamic market reflects our progress towards achieving sustained profitable growth. In addition, I look forward to completing a planned acquisition of Karel Manufacturing, referred to below, that supports our goal of making strategic investments to expand our capabilities and further contribute to our business diversification.”
Asset Purchase Agreement to further broaden capabilities in key markets
Celestica has entered into an asset purchase agreement with Lorenz Inc. and Suntek Manufacturing Technologies, SA de CV, collectively known as Karel Manufacturing (Karel), a Mexico-based manufacturing services company that specializes in wire harness assembly, machining, sheet metal fabrication, and systems integration of aerospace products. This acquisition is intended to expand Celestica's capabilities and to accelerate our growth in the aerospace and defense market. The transaction is subject to customary conditions and is expected to close in the fourth quarter of 2016.
Fourth Quarter 2016 Outlook
For the fourth quarter ending December 31, 2016, Celestica anticipates revenue to be in the range of $1.5 billion to $1.6 billion, non-IFRS operating margin to be 3.8% at the mid-point of expectations, and non-IFRS adjusted earnings per share to be in the range of $0.29 to $0.35. Celestica expects a negative $0.09 to $0.14 per share (pre-tax) aggregate impact on net earnings on an IFRS basis for employee stock-based compensation expense, amortization of intangible assets (excluding computer software) and restructuring charges. The company cannot predict changes in currency exchange rates, the impact of such changes on its operating results, or the degree to which it will be able to manage such impacts.
Celestica is dedicated to delivering end-to-end product lifecycle solutions to drive our customers’ success. Through our simplified global operations network and information technology platform, we are solid partners who deliver informed, flexible solutions that enable our customers to succeed in the markets they serve. Committed to providing a truly differentiated customer experience, our agile and adaptive employees share a proud history of demonstrated expertise and creativity that provides our customers with the ability to overcome complex challenges. For further information about Celestica, visit our website at www.celestica.com.