Celestica's Q3 Loss Widens on Charges
Published: 27 October 2006
by Mike Buetow
For the quarter ended Sept. 30, the EMS company took restructuring charges of $82 million.
Sales were slightly ahead of company guidance.
For the quarter, consumer sales rose 36% sequentially on sales to Microsoft (XBox) and Panasonic. Inventory turns rose 0.1 times to 6.9 times.
Celestica guided for fourth quarter sales of $2.25 billion to $2.45 billion.
CEO Steve Delaney said in a statement, "Revenues were very strong sequentially and year over year driven primarily by the growth realized in our consumer segment. Other segments were solid as well in this seasonally lower quarter. I'm pleased with the added diversification and the improvement in operating margins, despite the setbacks we've had in the performance of some of our facilities in the Americas and Eastern Europe."
Analsysts took a harder line. "While Celestica's last earnings report and guidance was a step in the direction, [this] was an emphatic step back. We believe Celestica, along with its underperforming peers Sanmina-SCI and Solectron, will continue to lose market share and incur restructuring charges for the foreseeable future," wrote Deutsche Bank analyst Carter Shoop in a research note Thursday night.
