Plexus Corp (PLXS) Misses Q3 EPS by 3c, Revenues Beat; Offers Q4 EPS/Revenue Mid-Point Outlook Below Consensus

Plexus Corp (NASDAQ: PLXS) reported Q3 EPS of $0.79, $0.03 worse than the analyst estimate of $0.82. Revenue for the quarter came in at $726 million versus the consensus estimate of $721.08 million.

Todd Kelsey, President and CEO, commented, “Our fiscal third quarter revenue of $726 million marks the fourth consecutive quarter of record revenue and a 17% increase from the comparable quarter last fiscal year. We delivered higher than anticipated revenueassociated with new program ramps while navigating a challenging supply chain environment, resulting in lower than expected operating margin. Within the quarter our teams continued their strong wins performance by exceeding $200 million in manufacturing wins and achieving record engineering wins, positioning us for meaningful growth.”

Patrick Jermain, Senior Vice President and CFO, commented, “During the fiscal third quarter, we continued to execute on our previously disclosed capital allocation strategy. In addition to the $280 million of offshore cash brought back to the U.S. in the fiscal second quarter, we repatriated approximately $100 million during the fiscal third quarter. We deployed the cash by investing in facilities and working capital, repurchasing approximately $57 million of shares under our repurchase program and reducing our borrowing.” Mr. Jermain continued, “In June, we successfully refinanced $150 million of the $175 million of senior notes that matured, reducing our debt by $25 million and lowering our borrowing costs given the favorable fixed interest rates. We anticipate repatriating an additional $50 million during the fiscal fourth quarter, which would result in more than $400 million repatriated for fiscal 2018.”

Mr. Kelsey continued, “Looking ahead to the fiscal fourth quarter, we expect our revenue growth trajectory to continue due to our wins performance and improved end markets. As a result, we are establishing revenue guidance of $735 to $775 million. At this revenuelevel, we would exceed our 12% annual revenue growth goal for the fiscal year. We are guiding fiscal fourth quarter GAAP diluted EPS in the range of $0.82 to $0.92. With performance in this range we would expect to deliver record operating profit.”

Mr. Kelsey concluded, “As we look forward to fiscal 2019, we are optimistic we will achieve further revenue growth, while also improving our margin performance, as we gain operating and fixed cost leverage from programs that are fully ramped into production. Further, we anticipate that improved operating efficiency, in conjunction with our share repurchase program, will result in meaningful EPS leverage.”

GUIDANCE:

Plexus Corp sees Q4 2018 EPS of $0.82-$0.92, versus the consensus of $0.91. Plexus Corp sees Q4 2018 revenue of $735-775 million, versus the consensus of $736.52 million.

For earnings history and earnings-related data on Plexus Corp (PLXS) click here.

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