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Celestica reports small quarterly loss, reversing year-earlier profit(Canadian Press DataFile Via Acquire Media NewsEdge) TORONTO _ Electronics manufacturer Celestica Inc. (TSX:CLS) generated a small third-quarter loss, reversing a year-earlier profit, as revenues took a hit from the recession and the company booked higher restructuring costs from earlier job cuts. However, president and CEO Craig Muhlhauser expressed optimism that revenue growth of 11 per cent between this year's second and third quarters -- from $1.4 billion to just under $1.6 billion -- and solid expectations for the current three month period indicates that demand for Celestica's products is stabilizing. The global economy began to recover this spring and growth is expected to pick up steam this fall and into next year as government stimulus packages work their way into local economies. ``As our third-quarter actuals and fourth-quarter guidance suggest, we're beginning to see modest revenue growth as end-market demand appears to be stabilizing from the volatility experienced earlier this year,'' Muhlhauser said in a conference call Thursday. ``While end-market visibility remains limited we currently have a growing pipeline of new business opportunities,'' he added. The Toronto company, which reports in U.S. dollars, saw a net loss of US$600,000 or zero cents per share, compared to a profit of $32.1 million or 14 cents per share a year earlier. Revenue fell 20 per cent to nearly $1.6 billion from more than $2 billion in the third quarter of 2008, just as the global recession was starting to affect the industry. Celestica chief financial officer Paul Nicoletti said revenue declined in most of the company's divisions, including server, enterprise communications, telecom, aerospace and defence, industrial and health care. Revenue in the consumer and storage divisions was ``relatively flat.'' However, he said all segments are beginning to show some demand growth. ``We're seeing very strong demand in the beginning of Q4, particularly on the consumer side,'' he said. In its financial report, Celestica revealed it booked a restructuring charge of $42 million in the latest quarter, more than double the $16.8 million taken the previous year. Removing the effect of the costs of a previously announced restructuring program, Celestica's adjusted net earnings for the quarter were $39.5 million or 17 cents per share compared to adjusted earnings of $54.3 million or 24 cents per share a year ago. Nicoletti said the company has so far booked $105 million of an estimated $150 million to $175 million in restructuring charges, and it expects to see the benefits from the most recent charges beginning in the fourth quarter. He added that Celestica continues to have a very strong balance sheet, with an expected $906 million in cash once a debt redemption is completed. Muhlhauser acknowledged that revenue levels are ``still recovering,'' but said he's optimistic that growth opportunities and restructuring will improve the company's bottom line in 2010. ``We are encouraged by the new growth opportunities we are pursuing, both organic and through acquisition, which we believe have the potential to impact revenue in 2010 and beyond,'' he said, adding that Celestica has already identified some potential opportunities in its ``traditional markets.'' Celestica has been restructuring its worldwide operations almost continually and has laid off tens of thousands of employees since 2001 _ mostly in higher-cost countries in North America and Western Europe _ as it closed factories and moved operations to lower-cost places. The company, controlled by the Onex Corp. (TSX:OCX) conglomerate, said it anticipates fourth-quarter revenue to be in the range of $1.55 billion to $1.70 billion, and adjusted net earnings per share to range from 14 cents to 20 cents. Celestica has factories around the world that make products for the communications, information technology and consumer electronics industries Shares in the company gained 19 cents to $9.65 in Thursday trading on the Toronto Stock Exchange. (c) 2009 The Canadian Press |