TORONTO — — Contract electronics maker Celestica Inc. Thursday said it swung to a second-quarter profit as further cost cuts offset slumping demand for its products.
Celestica, whose customers have included computer giants IBM and Hewlett-Packard Co., said it earned $39.8-million (U.S.), or 17 cents a share, in the three months ended June 30. That was up from a loss of $19.2-million, or 8 cents a share, in the same period a year earlier.
Revenue fell to $1.88-billion from $1.94-billion in the quarter, and adjusted earnings were 17 cents per share compared to 2 cents a share a year earlier. The report was in line with the outlook the company provided in April.
Chief executive officer Craig Muhlhauser said in a statement the results show Toronto-based Celestica's ability to improve its performance “despite challenging end markets.”
Celestica Inc.
For the third quarter, the company said it expects revenue of between $1.9-billion and $2.1-billion and adjusted earnings of between 17 cents and 23 cents per share.
That compares with analyst expectations of $2.1-billion for revenue and earnings of 20 cents per share before one-time items, according to Reuters Estimates.
The company has laid off close to 9,000 employees since 2005 as it worked to rein in its cost base in the face of falling demand in the last several years. It has said it estimates “additional restructuring charges” of between $50-million and $75-million, which it will record this year and in 2009.
“Operationally, we are executing well for our customers, and we continue to show improvements in operating margins and return on invested capital,” Mr. Muhlhauser said, adding the company continues to win new business across all of its key market segments.
Celestica's shares closed higher by 22 cents (Canadian), or 2.6 per cent, at $8.63 on the Toronto Stock Exchange.
