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Why Shares of Celestica Surged Today

Image source: Celestica.

What happened

Shares of supply chains solutions provider Celestica (NYSE: CLS) jumped on Friday after the company reported its fourth-quarter results. Celestica beat analyst estimates for both revenue and earnings, and exceeded its own guidance. At 11:15 a.m., the stock was up about 11%.

So what

Celestica reported fourth-quarter revenue of $1.62 billion, up 7% year over year and $70 million higher than the average analyst estimate. The communications end market accounted for 44% of revenue, up from 38% during the fourth quarter of 2015. The diversified end market was flat in terms of revenue, with its share of total revenue dropping three percentage points, to 27%.

Non-IFRS earnings per share (EPS) came in at $0.41, up from $0.27 during the prior-year period and $0.09 above analyst expectations. On an IFRS (International Financial Reporting Standards) basis, EPS rose to $0.15, up from $0.08. A net benefit of $0.07 per share from income taxes partially offset a negative $0.17 per-share impact from restructuring related the Celestica's decision to exit the solar panel manufacturing business.

Now what

Celestica CEO Rob Mionis summed up the company's progress in 2016:

We are proud of our many accomplishments this year. I am pleased with the progress we have made in setting the foundation for our strategy and delivering on our priorities and I am excited about the momentum we are building as we continue to drive profitable growth and increase shareholder value.

Celestica expects to produce between $1.4 billion and $1.5 billion of revenue during the first quarter of 2017, along with non-IFRS EPS in the range of $0.24 to $0.30. IFRS earnings will be negatively impacted by between $0.11 and $0.17 per share due to stock-based-compensation expense, amortization of intangible assets, and further restructuring charges.

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Timothy Green has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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