Plexus (PLXS) Q2 Earnings Top Estimates, Revenues Surge Y/Y
Plexus Corp PLXS reported second-quarter fiscal 2023 adjusted earnings of $1.45 per share, which surged 52.6% year over year. The Zacks Consensus Estimate was pegged at $1.16 per share.
Revenues of $1.071 billion increased 20.5% year over year. The top-line performance gained mainly from greater-than-expected Engineering and Sustaining Services performance amid persistent supply-chain troubles. Revenues beat the Zacks Consensus Estimate by 2.2%
In the reported quarter, revenues from Asia-Pacific, Europe, the Middle East and Africa, and the Americas rose 9.9%, 37.8% and 31.2%, respectively.
During the quarter, Plexus won 31 manufacturing contracts worth $275 million in annualized revenues when fully ramped into production. Trailing four-quarter manufacturing wins totaled more than $847 million in annualized revenues. Plexus also noted that funnel of qualified manufacturing opportunities now amounted to $4.2 billion, up $600 million from fiscal first quarter.
Plexus Corp. Price, Consensus and EPS Surprise
Plexus Corp. price-consensus-eps-surprise-chart | Plexus Corp. Quote
Market Sector Details
Industrial’s revenues were up 5.8% year over year to $439 million, contributing 41% to total revenues.
Healthcare/Life Sciences’ revenues jumped 38.2% from the year-ago quarter’s levels to $488 million, contributing 46% to total revenues.
Revenues from Aerospace/Defense increased 19% year over year to $144 million, contributing 13% to total revenues.
The top 10 customers of the company accounted for 51% of net revenues for fiscal second quarter.
Operating Details
Gross profit on a GAAP basis increased 34.6% year over year to $103 million. Gross margin expanded 100 basis points (bps) to 9.6%.
Selling and administrative expenses (4.3% of revenues) increased 13.2% from the year-ago quarter to $46.1 million.
PLXS reported an adjusted operating income of $56.9 million, up 58.9% year over year. Adjusted operating margin expanded 130 bps to 5.3%.
Balance Sheet & Cash Flow
As of Apr 1, Plexus had cash & cash equivalents worth $269.7 million compared with $247.9 million as of Dec 31, 2022.
As of Apr 1, PLXS had long-term debt and finance lease obligations, net of the current portion of $188.7 million compared with $187.3 million as of Dec 31, 2022.
In the quarter under review, the cash flow from operations was $106 million. Plexus reported a free cash flow of $79.6 million.
PLXS repurchased shares worth $12.4 million at an average price of $98.75 per share in the fiscal second quarter. It has shares worth $22.6 million left under its existing $50 million share repurchase authorization.
Guidance
For third-quarter fiscal 2023, revenues are projected to be between $1.00 billion and $1.05 billion.
Non-GAAP operating margin is expected to be between 4.5% and 5%. Non-GAAP earnings are expected in the range of $1.05-$1.23 per share, including 19 cents of stock-based compensation expenses, but excludes $0.29 in restructuring charges.
Zacks Rank & Other Stocks to Consider
Plexus currently has a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology space are Arista Networks ANET, Asure Software ASUR and Salesforce CRM. Asure Software and Salesforce currently sport a Zacks Rank #1 (Strong Buy) whereas Arista Networks carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Arista Networks’ 2023 earnings has increased 0.7% in the past 60 days to $5.83 per share. The long-term earnings growth rate is anticipated to be 14.2%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 14.2%. Shares of ANET have increased 29% in the past year.
The Zacks Consensus Estimate for Asure Software’s 2023 earnings has increased 25% in the past 60 days to 35 cents per share. The long-term earnings growth rate is anticipated to be 25%.
Asure Software’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 445.8%. Shares of ASUR have increased 122.3% in the past year.
The Zacks Consensus Estimate for Salesforce’s 2023 earnings has increased 22% in the past 60 days to $7.11 per share. The long-term earnings growth rate is anticipated to be 16.8%.
Salesforce’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 15.6%. Shares of the company have increased 3.2% in the past year.
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