By Krithika Krishnamurthy
Jan 22 Contract electronics manufacturer
Celestica Inc was optimistic about the second
half of 2013, despite forecasting first-quarter profit largely
below analysts' expectations.
The Toronto-based company said on Tuesday that it was upbeat
about its communication business, which brought in about 35
percent of the company's revenue last year.
"Our communication end market is expected ... to improve in
the second half, in part due to a new win with one of our top
customers who has made the decision to consolidate their supply
base," Chief Executive Craig Muhlhauser said in a call with
Celestica forecast adjusted profit of between 11 and 17
cents per share on revenue of between $1.325 billion and $1.425
billion for the three months ending March, which would be the
first quarter after it stopped making products for Research in
The company, which makes servers and other products for
branded manufacturers such as IBM and Cisco Systems Inc
, recorded revenue of $1.69 billion in the first quarter
of 2012, 19 percent of which came from the BlackBerry maker.
Analysts on average were expecting an adjusted profit of 16
cents per share on revenue of $1.43 billion for the quarter
ending March, according to Thomson Reuters I/B/E/S.
The company also said it now expects restructuring charges
related to RIM's exit to be between $55 million and $65 million,
up from its prior estimate of between $40 million and $50
Celestica said it completed its manufacturing services for
RIM - once its biggest customer - and related transition
activities by the end of 2012.
It had said last June that it would stop making products for
The company also said on Tuesday that it would lose a server
customers, who accounted for about $50 million in quarterly
revenue, in the second quarter.
Celestica reported a net income of $7.2 million, or 4 cents
per share, for the fourth quarter, down from $69.2 million, or
32 cents per share, a year earlier.
The company, which competes with Plexus Corp and
Benchmark Electronics, earned $50.3 million or 25 cents
per share, excluding items.
Revenue fell 15 percent to $1.50 billion, consistent with
the company's forecast of between $1.43 billion and $1.53
billion. Revenue from RIM, which contributed 19 percent of the
company's 2011 revenue, was minimal.
Analysts expected the company to earn 19 cents per share on
revenue of $1.48 billion.