Canadian computer and telecommunications equipment maker Celestica Inc continued its stock market roll last week, notching its highest-ever share price after posting stronger than expected third-quarter results. Toronto-based Celestica closed last week with a record share price of $56.44 on the New York Stock Exchange. The stock has more than doubled this year. The company said last week that net profit for its third quarter to September 30, excluding one-time charges, had doubled to $32.6m, or 37 cents a share, from $16.2m, or 24 cents a share, a year earlier. Celestica had been expected to make 33 cents a share, according to a poll of analysts watching the firm, conducted by IBES International Ltd. Revenue rose 67% on the year-ago to $1.36bn, fueled by internal growth and development of the firm’s telecommunications-related business.
On the strength of the results, Keith Dunne an analyst at San Francisco investment bank, Robertson Stephens, upped his earnings-per-share estimate for the year to $1.39 from $1.28. Celestica provides a range of electronics manufacturing services, including design, prototyping, assembly, testing, product assurance, supply chain management, distribution and after-sales service, mainly to OEMs. The firm is benefiting from a growing trend among computer and telecoms firms to outsource manufacturing process to reduce expenses and time to market. Celestica counts Nortel Networks Inc, Sun Microsystems Inc and Hewlett-Packard Co in its client roster.
During the quarter Celestica completed the acquisition of H-P’s Healthcare Solutions Group printed circuit board assembly operation, based in Andover, Massachusetts. It also closed its purchase of Portland, Oregon-based VXI Electronics, a provider of voltage regulator modules (VRMs) and customer power supplies. After acquisition charges and amortization, Celestica had net income of $19.5m or 23 cents a share compared with $6.3m or 10 cents a share in the year-earlier.
