ANGLETON, TX, Oct. 21 -- Benchmark Electronics saw third-quarter profits rise 40% as sales jumped by $50 million.

The EMS maker said September quarter earnings were $18 million, up from $12.9 million last year, a new third-quarter high. Revenue was $505 million, up from $455 million.

Analysts forecast sales of $496 million for the quarter.

Operating margins rose to 4.8% and inventories were up $13 million, to $290 million, the company said.

Benchmark guided for fourth-quarter sales of $505 million to $530 million.

Celestica Reports GAAP Loss on $2.2b in Revenue
10-21-2004

by Mike Buetow

TORONTO, Oct. 21 -- Celestica Inc. today said September quarter revenue was $2.2 billion, up 33% from last year and in line with previous guidance, despite lower telecom demand.

The EMS maker reported a GAAP net loss of $22.3 million, includes pretax restructuring charges of $47.7 million, including $16.6 million for inventory writedowns and a $12 million gain associated with the sale of the Power Systems business.

Last year Celestica reported a GAAP net loss of $65 million, including restructuring and other charges of $49.1 million.

"Despite lower demand this quarter from some of our largest communications and IT customers, we continued to expand margins, reduce SG&A spending, improve customer diversity, act on unprofitable or non-core activities and generate healthy cash flow from operations," said chief executive Steve Delaney, in a press statement.

Delaney called end-market demand "less stable" than earlier in the year. The company anticipates December quarter revenue in the range of $2.1 billion to $2.3 billion, with a softening in end-market demand balancing normal seasonality.

In a research note, Deutsche Bank said  it remains cautious on the sector, including Celestica, due to slowing demand and aggressive pricing. "Celestica`s fourth quarter guidance speaks volumes to the anemic end-market environment (flat quarter-on-quarter in the [usuallyl] seasonally strong fourth quarter," the firm said. 

Year-to-date Celestica's revenue has risen 35% to $6.51 billion and the GAAP net loss is $56.2.

Celestica said it has ceased creating its own reference designs and will exit its channel distribution activities for these products. Said Delaney: "We remain committed to providing enterprise-wide server solutions to our customers, including product design services, manufacturing, logistics services, and after-market services".

LOUISVILLE, Oct. 21 -- Sypris Solutions' third-quarter revenue increased 72% to a record $118.5 million, up from $68.9 million a year ago. Net income rose to $3.5 million, versus $700,000, for the manufacturer of industrial and electronics products. The firm's chief executive issued a cautious near-term outlook on orders for electronics assemblies.

For the nine months ended Sept. 30, the company reported revenue increased 53% to a record $303.7 million and net income increased 87% to $8.9 million.

The firm's electronics group has sales of $40 million in the third quarter compared to $46.5 million last year and $37.7 million in Q2. Gross profit was $6.8 million, down from $8.2 million in 2003 and $7.5 million sequentially. The company cited a change in mix reflecting increased sales of lower margin circuit card assemblies and reduced sales of higher margin products to certain government agencies.

Year to date electronics revenue is $118.6 million, down from $127.7 million. Gross profit is $22.2 million compared to $25.2 million for the prior year period.

"Net orders for our Electronics Group declined during the quarter to $33.1 million, but backlog remained solid at $124 million," said Jeffrey T. Gill. "In the short-term, we believe the outlook for growth in this segment of our business will remain somewhat constrained at least until such time as the delays in program funding to accommodate our current military operations are successfully resolved. For the long-term, we remain optimistic that we are well-positioned on a series of major programs that should contribute to the company's growth."