TORONTO -- Celestica reported third quarter revenue rose 2% year-over-year to $1.55 billion.

The EMS provider swung to a net loss of $6.9 million, down from a profit of $30.4 million a year ago, as restructuring charges mounted. The pretax income was $6.4 million, down from $40.3 million.

Gross profit fell 21% to $97.7 million. The non-IFRS operating margin rose 110 basis points to 3.9%. Free cash flow was $15.8 million compared to $66.2 million for Q3 2019.

Advanced Technology Solutions (ATS) segment revenue decreased 6%, making up 34% of total revenue. The segment margin was 3.7%, compared to 2.8% last year. Connectivity & Cloud Solutions segment revenue increased 7%, and segment margin rose 120 basis points to 4%.

ATS includes aerospace and defense (A&D), industrial, energy, healthTech and capital equipment (semiconductor, display, and power & signal distribution equipment) businesses. CCS includes communications and enterprise (servers and storage) end markets.

“In the third quarter, Celestica delivered sequential and year-over year revenue growth, as well as non-IFRS operating margin expansion,” said Rob Mionis, president and CEO, Celestica. “Our strong operating performance while managing a dynamic market environment reflects the strength of our portfolio and the progress we have made in executing our strategy. Our global team will continue to adapt to the evolving needs of our customers across the markets we serve, and we remain committed to generating sustainable long-term value for our customers and shareholders.”

HealthTech and capital equipment businesses were more than offset by lower Covid-19-related demand impacts in commercial aerospace and industrial businesses. Semiconductor and display capital equipment demand improved but is expected to level off over the next couple quarters. Industrial demand leveled sequentially, and healthTech benefited from new program ramps.

Service provider demand increased, offseting revenue declines from planned disengagements with Cisco

Celestica said total restructuring costs in 2020 will be approximately $30 million.

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