Electronic Manufacturing Services provider
) reported third quarter 2012 earnings of 66 cents per share, which
surpassed the Zacks Consensus Estimate by three cents and was in
line with the high end of management's guided range of 60 cents to
66 cents per share. Earnings surged 13.9% year over year, primarily
due to higher sales, favorable foreign exchange and a lower tax
rate in the quarter.
Total revenue in the quarter increased 8.9% on a year-over-year
basis to $608.8 million, which was within management's guided range
of $590.0 million to $620.0 million, and also surpassed the Zacks
Consensus Estimate of $607.0 million.
The year-over-year increase in revenue was primarily driven by
strong performance of the Industrial/Commercial segment. The
segment delivered revenue of $187.0 million, up 43.8% year over
year and contributed 31.0% to the total revenue in the reported
quarter compared with 23.0% in the year-ago quarter.
Medical (21.0% of the total revenue) increased 11.4% year over
year to $127.0 million. Defense/ Security/Aerospace (9% of the
total revenue) improved 3.6% year over year to $58.0 million.
However, Networking/Communications (39.0% of the total revenue)
decreased 8.5% year over year to $237.0 million.
During the quarter, Plexus won 36 new programs in the
manufacturing solutions group and the company expects to generate
approximately $203.0 million in annualized revenue once production
Top 10 customers of the company accounted for 60.0% of the total
Juniper Networks Inc.
) was the only customer accounting for 10.0% or more of revenues
during the quarter.
Gross profit increased 6.1% from the year-ago quarter to $57.4
million. Gross margin for the quarter stood at 9.4% compared with
the year-ago level of 9.7%. Selling, general & administrative
expense (SG&A) increased 3.2% year over year to $30.1 million.
As a percentage of revenue, SG&A declined 30 basis points (bps)
to 4.9%. Operating profit jumped 9.6% year over year to $27.3
million, while operating margin remained flat annually at 4.5%.
Net income increased 6.8% year over year to $23.5 million. Net
margin stood at 3.9% in the third quarter.
Plexus exited the quarter with $277.9 million in cash and
investments versus $257.8 million in the previous quarter.
Long-term debt and capital lease obligations (including the current
portion) amounted to $274.7 million versus $279.1 million in the
Fourth Quarter Guidance
For the forthcoming fourth quarter 2012, total revenue is
projected in the range of $590.0 million to $620.0 million. Plexus
expects earnings to be between 60 cents and 66 cents per share,
excluding any restructuring charges and including approximately 8
cents per share in stock-based compensation expenses. The Zacks
Consensus Estimate is pegged at 66 cents for the fourth
We believe that stabilizing end markets, new business
opportunities, particularly in the industrial/commercial and
medical sector and global expansion will drive growth over the long
term. We also believe that the gradual improvement in the U.S.
market will boost Plexus' top line going forward. However, intense
competition, continued component challenges and supply chain
constraints remain major concerns for Plexus over the long
Thus, we have a Neutral recommendation on Plexus over the long
term (6-12 months). Currently, Plexus has a Zacks #3 Rank, which
translates into a Hold rating over the short term.
JUNIPER NETWRKS (JNPR): Free Stock Analysis
PLEXUS CORP (PLXS): Free Stock Analysis Report
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