TORONTO - Celestica Inc. (TSX:CLS), a global provider of electronics manufacturing services, turned out second-quarter earnings of US$39.8 million while demand for its products slid lower.
The results, which were reported in U.S. dollars, reversed a year-ago loss of US$19.2 million. The earnings amounted to 17 cents per share, up from a loss of eight cents per share in the same period last year.
Revenue came in at US$1.88 billion compared to US$1.94 billion.
The average analyst estimate had been for earnings of 17 cents per share, based on 15 analysts surveyed by Thomson Financial. The average revenue estimate had been for $1.93 billion in revenue, based on 12 analysts.
The results marked another step towards wrapping up a restructuring plan that started in 2001 and went through various stages covering everything from increasing product demand to consolidating facilities.
Celestica operates a global manufacturing network that has made products for companies such as IBM Corp., Cisco Systems Inc. and products for Microsoft's XBox.
The company cut thousands of jobs in the United States, Canada and Western Europe while adding employees in other areas of the world to get its capacity in line with its business strategy and the markets.
On Thursday, Celestica said it expects to face another $50 million to $75 million in restructuring costs before the process wraps up in late 2009.
"The history of Celestica was a long restructuring process, but ... this quarter the restructuring impact to our earnings was relatively minor," said president and chief executive officer Craig Muhlhauser.
"We will continue to make adjustments as the market requires, but by and large we've got an operating network and a game plan to allow us to continually grow."
The Toronto-based company also provided third-quarter revenue guidance of between $1.9 billion and $2.1 billion, with adjusted net earnings per share of between 17 and 23 cents.
However, executives declined to provide full-year guidance because of a lack of visibility for the coming quarters. The information technology and telecom segments of the company's business are expected to pull down growth by an unspecified amount.
Shares in Celestica closed at $8.63 on the TSX, up 22 cents before the results were announced.
Muhlhauser said the company is focusing internationally on markets like Brazil, China and India for future growth.
"Our job is to move more of the business that people do internally to an outsourcing model, so every company within those geographies represents a growth opportunity for our company," he said.
One of the countries where Celestica is expecting significant growth is Brazil.
It's "a very robust growing economy, they've got their inflation under control and their currency is stabilized," he said.
"There are significant duties associated with companies trying to import products in Brazil so they like that we have a local presence."
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