Contract electronics manufacturer Plexus Corp (PLXS.O) said it does not expect any material impact to its current quarter results after losing business from its largest customer Juniper Networks Inc (JNPR.N).
Plexus shares fell almost 30 percent to a more than three year low of $19.63.
The company said it expects more revenue from Juniper in the second quarter, as it builds some products in advance of the transition, but sees revenue tailing off by the second half of the fiscal year, Plexus said on a conference call.
Juniper informed Plexus on Monday of its decision and is expected to completely cut off its manufacturing relationship by the end of Plexus's fiscal year, Plexus said.
Juniper counts on contract manufacturers to build the network gear and switches it engineers, and until now Plexus won the lion's share of Juniper's business. Juniper contributed 17 percent to Plexus' sales of $2.23 billion for the year ended October 2011.
Plexus had over the last year moved some of its manufacturing for Juniper to low-cost facilities in Penang, Malaysia from Wisconsin.
"It was clear to us that (Plexus') management was completely blindsided by this decision and we believe this event places even more skepticism around the company's long-term financial objectives," Topeka Capital Markets analyst Brian White wrote in a note to clients.
Juniper is facing increased competition and end-market demand is weakening, White said, which is why it needs to look for improved pricing and efficient supply chains.
Juniper did not disclose who would get Plexus' share of its business but it also contracts production from Flextronics International Ltd (FLEX.O) and Canada's Celestica Inc (CLS.TO).
(The story corrects paragraph 4 to add words "Plexus's fiscal")
(Reporting by Chandni Doulatramani in Bangalore; Editing by Supriya Kurane)