Plexus PLXS reported first-quarter fiscal 2020 adjusted earnings of $1 per share that beat the Zacks Consensus Estimate by 7.5% and increased 9.9% year over year.
Revenues of $852 million beat the consensus mark of $801 million and increased 11.2% year over year. Strong revenues from Aerospace/Defense, Industrial/Commercial and Healthcare/Life Sciences sectors drove the top line.
Asia-Pacific (APAC) revenues increased 19.3% year over year to $451 million. Europe, the Middle East and Africa (EMEA) revenues totaled $85 million, up 16.4% year over year. However, Americas (AMER) revenues declined 0.3% to $353 million.
Plexus won 30 manufacturing contracts during the quarter, worth $167 million in annualized revenues. Trailing four-quarter manufacturing wins totaled $843 million in annualized revenues.
Plexus Corp. Price, Consensus and EPS Surprise
Plexus Corp. price-consensus-eps-surprise-chart | Plexus Corp. Quote
Market Sector Details
Healthcare/Life Sciences revenues rose 3.7% from the year-ago quarter to $312 million. The sector accounted for 36.6% of total revenues.
Industrial/Commercial revenues grew 41.6% year over year to $310 million and accounted for 36.4% of total revenues.
Aerospace/Defense revenues jumped 39.8% year over year to $172 million and accounted for 20.2% of total revenues.
Communications accounted for 6.8% of total revenues. Revenues from the sector decreased 52.8% year over year to $58 million.
Notably, the top 10 customers of the company accounted for 54% of net revenues.
Gross profit increased 9.4% year over year to $79.2 million. However, gross margin contracted 20 basis points (bps) year over year to 9.3%.
Selling and administrative expenses (4.6% of revenues) increased 10.8% from the year-ago quarter to approximately $39.3 million.
Plexus reported adjusted operating income of $39.9 million, up 8.1% year over year. However, adjusted operating margin contracted 10 bps year-over-year basis to 4.7%.
Balance Sheet & Cash Flow
As of Jan 4, 2020, Plexus had cash & cash equivalents worth $252.9 million compared with $223.8 million as of Sep 28, 2019.
Moreover, as of Jan 4, 2020, the company had a long-term debt of $186.8 million compared with $187.3 million as of Sep 28, 2019.
In first-quarter fiscal 2020, Plexus generated free cash flow of $61 million.
Further, the company repurchased shares worth $6.3 million at an average price of $69.82 per share.
ROIC (tax-effected annualized adjusted operating income divided by average invested capital over two quarters) was 14.7% for first-quarter fiscal 2020. Plexus’ weighted average cost of capital for fiscal 2020 was 8.8%.
For second-quarter fiscal 2020, revenues are projected between $790 million and $830 million. The Zacks Consensus Estimate is currently pegged at $821.6 million, indicating 4.1% growth from the figure reported in the year-ago quarter.
Additionally, Plexus expects GAAP earnings between 80 cents and 90 cents per share.
The consensus mark for earnings is currently pegged at 96 cents, suggesting 21.5% growth from the figure reported in the year-ago quarter.
Zacks Rank & Stocks to Consider
Plexus currently carries a Zacks Rank #3 (Hold).
Perion Network Ltd. PERI, CEVA Inc. CEVA and Splunk Inc. SPLK are some better-ranked stocks in the broader computer and technology sector. All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Perion, CEVA and Splunk are set to report quarterly results on Feb 12, 18 and 27, respectively.
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