We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Plexus (PLXS) Q2 Earnings Miss Estimates, Revenues Beat
Read MoreHide Full Article
Plexus (PLXS - Free Report) reported second-quarter fiscal 2019 adjusted earnings of 79 cents per share, which increased 6.8% year over year. However, the figure came below the Zacks Consensus Estimate of 85 cents.
Nevertheless, revenues of $789 million beat the consensus mark of $777 million and increased 12.9% on a year-over-year basis. Strong performance of Healthcare/Life Sciences and Aerospace/Defense segments drove top-line growth.
Healthcare/Life Sciences revenues (38% of total revenues) were up 21% from the year-ago quarter to $300 million.
Industrial/Commercial revenues (31.7%) were up 3.3% year over year to $250 million.
Aerospace/Defense segment revenues (17.7%) grew 27.3% on a year-over-year basis to $140 million.
Revenues from the Communications sector (12.5%) remained flat year over year at $99 million.
Region-wise, revenues from the Americas (AMER) increased 20.5% from the year-ago quarter to $364 million. Revenues from the Asia Pacific region (APAC) rose 8% to $378 million. Revenues from Europe, the Middle East and Africa (EMEA) totaled $76 million, up 2.7% year over year.
Contract Wins
Plexus won 36 manufacturing contracts during the quarter worth $247 million in annualized revenues. Manufacturing wins contributed $912 million in annualized revenues in the trailing four quarters.
Notably, the top 10 customers of the company together accounted for 59% of net revenues, which stayed flat sequentially.
Operating Details
Adjusted gross profit increased 7.8% year over year $71 million. However, adjusted gross margin contracted 40 basis points (bps) year over year to 9% in the second quarter.
Reported selling and administrative expenses (4.7% of revenues) increased 5.1% from the year-ago quarter to approximately $37.5 million.
Plexus reported adjusted operating income of $33.2 million, up 7.6% year over year. However, adjusted operating margin contracted 20 bps on a year-over-year basis to 4.2%.
Notably, margins came under pressure as a result of unfavorable customer mix.
Return on Invested Capital (ROIC) in second-quarter fiscal 2019 was 13.3%
Balance Sheet & Cash Flow
Plexus exited the quarter with cash & cash equivalents worth $184 million compared with $188.8 million in first-quarter fiscal 2019.
In second-quarter fiscal 2019, the company used cash of $1.2 million for operations and $29.7 million for capital expenditures, resulting in negative free cash flow of $30.9 million.
Plexus had long-term debt of $187.1 million compared with $187.6 million in the year-ago quarter. Share repurchases for the quarter amounted to $56.2 million.
Guidance
Third-Quarter Fiscal 2019
Revenues are projected in the range of $760 million and $800 million and operating margin is expected to be in the band of 4.3% and 4.7%.
Additionally, Plexus expects GAAP earnings in the range of 76 cents to 86 cents.
Growth in Aerospace/Defense and Healthcare/Life Sciences sectors may likely be offset by Communications sector’s decline and led to the soft guidance
2019
Plexus anticipates free cash flow to be in the range of $40 to $60 million. Moreover, the company expects to achieve its “target operating margin range” in fourth-quarter fiscal 2019 owing to enhanced productivity and reduction in costs.
The expected long-term earnings growth rate for Xilinx, Juniper and SS&C Technologies is 12%, 7.1% and 12%, respectively.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
Image: Bigstock
Plexus (PLXS) Q2 Earnings Miss Estimates, Revenues Beat
Plexus (PLXS - Free Report) reported second-quarter fiscal 2019 adjusted earnings of 79 cents per share, which increased 6.8% year over year. However, the figure came below the Zacks Consensus Estimate of 85 cents.
Nevertheless, revenues of $789 million beat the consensus mark of $777 million and increased 12.9% on a year-over-year basis. Strong performance of Healthcare/Life Sciences and Aerospace/Defense segments drove top-line growth.
Plexus Corp. Price, Consensus and EPS Surprise
Plexus Corp. Price, Consensus and EPS Surprise | Plexus Corp. Quote
Segment Details
Healthcare/Life Sciences revenues (38% of total revenues) were up 21% from the year-ago quarter to $300 million.
Industrial/Commercial revenues (31.7%) were up 3.3% year over year to $250 million.
Aerospace/Defense segment revenues (17.7%) grew 27.3% on a year-over-year basis to $140 million.
Revenues from the Communications sector (12.5%) remained flat year over year at $99 million.
Region-wise, revenues from the Americas (AMER) increased 20.5% from the year-ago quarter to $364 million. Revenues from the Asia Pacific region (APAC) rose 8% to $378 million. Revenues from Europe, the Middle East and Africa (EMEA) totaled $76 million, up 2.7% year over year.
Contract Wins
Plexus won 36 manufacturing contracts during the quarter worth $247 million in annualized revenues. Manufacturing wins contributed $912 million in annualized revenues in the trailing four quarters.
Notably, the top 10 customers of the company together accounted for 59% of net revenues, which stayed flat sequentially.
Operating Details
Adjusted gross profit increased 7.8% year over year $71 million. However, adjusted gross margin contracted 40 basis points (bps) year over year to 9% in the second quarter.
Reported selling and administrative expenses (4.7% of revenues) increased 5.1% from the year-ago quarter to approximately $37.5 million.
Plexus reported adjusted operating income of $33.2 million, up 7.6% year over year. However, adjusted operating margin contracted 20 bps on a year-over-year basis to 4.2%.
Notably, margins came under pressure as a result of unfavorable customer mix.
Return on Invested Capital (ROIC) in second-quarter fiscal 2019 was 13.3%
Balance Sheet & Cash Flow
Plexus exited the quarter with cash & cash equivalents worth $184 million compared with $188.8 million in first-quarter fiscal 2019.
In second-quarter fiscal 2019, the company used cash of $1.2 million for operations and $29.7 million for capital expenditures, resulting in negative free cash flow of $30.9 million.
Plexus had long-term debt of $187.1 million compared with $187.6 million in the year-ago quarter. Share repurchases for the quarter amounted to $56.2 million.
Guidance
Third-Quarter Fiscal 2019
Revenues are projected in the range of $760 million and $800 million and operating margin is expected to be in the band of 4.3% and 4.7%.
Additionally, Plexus expects GAAP earnings in the range of 76 cents to 86 cents.
Growth in Aerospace/Defense and Healthcare/Life Sciences sectors may likely be offset by Communications sector’s decline and led to the soft guidance
2019
Plexus anticipates free cash flow to be in the range of $40 to $60 million. Moreover, the company expects to achieve its “target operating margin range” in fourth-quarter fiscal 2019 owing to enhanced productivity and reduction in costs.
Zacks Rank & Stocks to Consider
Plexus currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader computer and technology sector include Xilinx, Inc. , Juniper Networks, Inc. (JNPR - Free Report) and SS&C Technologies Holdings, Inc. (SSNC - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The expected long-term earnings growth rate for Xilinx, Juniper and SS&C Technologies is 12%, 7.1% and 12%, respectively.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?
Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.
See Latest Stocks Today >>