Plexus Corp (PLXS) Tops Q4 EPS by 9c, Revenues Beat; Lifts 1Q19 EPS/Revenue Outlook

Plexus Corp (NASDAQ: PLXS) reported Q4 EPS of $0.96, $0.09 better than the analyst estimate of $0.87. Revenue for the quarter came in at $771 million versus the consensus estimate of $760.98 million.

• Record fiscal fourth quarter revenue of $771 million and record fiscal 2018 revenue of $2.9 billion
• Fiscal fourth quarter GAAP diluted EPS of $2.20
• Fiscal fourth quarter non-GAAP adjusted diluted EPS of $0.96, excluding $1.24 per share related to net non-recurring tax benefits
• Initiates fiscal first quarter 2019 revenue guidance of $750 to $790 million with GAAP diluted EPS of $0.85 to $0.95

Todd Kelsey, President and CEO, commented, “We continue to produce meaningful growth, finishing our fiscal fourth quarter with record revenue of $771 million, near the high end of our guidance range. In addition, as a result of strong execution, we delivered fiscal fourth quarter 2018 operating margin of 4.8%, comfortably within our target range of 4.7% to 5.0%. Our solid growth and operating performance led to non-GAAP diluted EPS of $0.96, a result that was above our guidance range. Further, we delivered fiscal year 2018 revenue of $2.9 billion, representing a 14% increase over fiscal 2017.”

Patrick Jermain, Senior Vice President and CFO, commented, “During the fiscal fourth quarter, we repatriated over $50 million of offshore cash which we deployed by investing in facilities and working capital and repurchasing approximately $39 million of shares under our repurchase programs. In total, we brought back approximately $430 million in fiscal 2018.”

Mr. Jermain continued, “Fiscal fourth quarter GAAP diluted EPS included a net benefit of $1.24 per share related to U.S. tax reform. The benefit resulted from adjustments made in applying additional guidance from the U.S. Department of the Treasury, as well as our utilization of accumulated U.S. net operating loss carryforwards, which reduced the repatriation tax. We also recognized a benefit from the reversal of our valuation allowance previously maintained on our U.S. net deferred tax assets. With future projected taxable income in the U.S. due to tax reform, the valuation allowance is no longer required.”

Mr. Kelsey continued, “As we look to the fiscal first quarter of 2019, we are guiding revenue of $750 million to $790 million. We expect continued strong operating performance with operating margin in the range of 4.6% to 5.0% and GAAP diluted EPS in the range of $0.85 to $0.95. We believe that our operating performance strength in the fiscal first quarter of 2019 will alleviate the impact of increased tax expense, estimated at $0.05 per share above the previous quarter.”

Mr. Kelsey concluded, “We anticipate fiscal 2019 to be another strong growth year as we achieve full production volumes of recently launched programs and expect to capitalize on our robust fiscal 2018 wins performance. Further, we currently see overall strength in our end markets and believe we can navigate the ongoing supply chain constraints. This growth, when combined with operating margin within our 4.7% to 5.0% target range and our share repurchase program, should result in meaningful EPS expansion.”

GUIDANCE:

Plexus Corp sees Q1 2019 EPS of $0.85-$0.95, versus the consensus of $0.88. Plexus Corp sees Q1 2019 revenue of $750-790 million, versus the consensus of $758.98 million.

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

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