TORONTO -- Celestica Inc.'s second-quarter net loss was $30.3 million on sales of $2.2 billion, the company said today. Earnings dropped from $12.6 million last year. Revenue, while at the high side of previous guidance, slipped 1%, on strong demand for telecom and server gear.

Sales were up 15% sequentially as electronics assemblies for servers and telecom infrastructure were each up over 15%. Consumer electronics revenue was up 45% sequentially on product ramps for Microsoft (Xbox) and Panasonic.

During the quarter, inventory turns improved half a turn to sequentially to 6.8 times and return on invested capital improved to 6.7%. The company took $20 million in restructuring charges and a $33 million non-cash loss on the sale of its plastics business.

"The sequential revenue growth reflects the growing benefits from our focus on revenue diversification," said CEO Steve Delaney, in a press release. "With a backdrop of stable end markets, improved efficiencies in our high growth facilities, ramping new programs, and the completion of our restructuring activities, we are confident in continued revenue growth and stronger margins throughout 2006."

Celestica guided for September quarter revenue of $2.15 billion to $2.35 billion. The revenue outlook reflects a stable end-market environment and additional volume from ramping new programs.

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