Circuits Assembly Online Magazine - Benchmark Electronics Swings to Q3 Profit Despite Charges

TEMPE, AZ -- Benchmark Electronics today announced third quarter revenues slipped 5% year-over-year to $526 million.

Sales were up 7.1% sequentially. Net income for the period ended Sept. 30, fell 14% to $6 million, but reversed a $3 million second quarter loss.

Results for the second and third quarters include the impact of approximately $3.4 million and $1.3 million of Covid-19 related costs, respectively.

"We delivered sequential revenue and earnings growth in the third quarter as our business started to recover from second quarter disruptions, enabling earnings to come in above our guidance for the quarter," said Jeff Benck, CEO and oresident, Benchmark. "The results were driven by a 45% year-over-year improvement in semi-cap and an 18% sequential improvement in the aerospace and defense sector, where demand for defense related products remains strong. In addition, third quarter non-GAAP gross and operating margins improved significantly from the second quarter, reaching 8.7% and 3.0% respectively, as our global network returned to normal operating capacity."

"Entering the fourth quarter, we expect stronger demand and new programs in defense, industrials and telecommunications to offset declines in medical as we are completing some of the incremental upside builds for Covid-19 related therapeutic equipment. We continue to make progress on improving gross margins as we expect to achieve our 9% target in the fourth quarter, which will enable us to also improve earnings sequentially."

Overall, higher-value market revenues during the third quarter were up 7% quarter-over-quarter and down 1% year-over-year. Traditional market revenues were up 9% quarter-over-quarter due to stronger demand for high performance computing and telecommunications products and down 21% year-over-year primarily from the company's exit of a legacy computing contract in 2019, which it decided not to renew.

Benchmark forecast revenues of $500 million to $540 million for its fourth quarter, with expected restructuring charges of $2.8 million to $3.2 million.