Plexus (PLXS) Q3 Earnings Top Estimates, Revenues Surge Y/Y
Plexus Corp PLXS reported third-quarter fiscal 2023 adjusted earnings per share (EPS) of $1.32, which decreased 0.8% year over year. The Zacks Consensus Estimate for the same was pegged at $1.15 per share.
Revenues of $1.021 billion increased 4.1% year over year. The top-line performance gained mainly from solid momentum in Healthcare/Life Sciences and Aerospace/Defense sectors. Revenues missed the Zacks Consensus Estimate by 0.4%.
In the reported quarter, revenues from Asia-Pacific declined 2.4%. Revenues from Europe, the Middle East and Africa, and the Americas rose 25% and 8.2%, respectively.
Plexus Corp. Price, Consensus and EPS Surprise
Plexus Corp. price-consensus-eps-surprise-chart | Plexus Corp. Quote
In the fiscal third quarter, Plexus won 30 manufacturing contracts worth $321 million in annualized revenues when fully ramped into production. Trailing four-quarter manufacturing wins totaled more than $968 million in annualized revenues. Plexus also noted that a funnel of qualified manufacturing opportunities now amounted to $4 billion, down $237 million from the fiscal second quarter.
Market Sector Details
Industrial revenues were down 5.7% year over year to $428 million, contributing 42% to total revenues.
Healthcare/Life Sciences’ revenues jumped 12.5% from the year-ago quarter’s levels to $451 million, contributing 44% to total revenues.
Revenues from Aerospace/Defense increased 13.5% year over year to $143 million, contributing 14% to total revenues.
The top 10 customers of the company accounted for 51% of net revenues for the fiscal third quarter.
Operating Details
Gross profit on a GAAP basis increased 0.1% year over year to $93.6 million.
Gross margin contracted 30 basis points (bps) to 9.2%.
Selling and administrative expenses decreased 3.9% from the year-ago quarter to $42.3 million.
PLXS reported an adjusted operating income of $51.3 million, up 3.5% year over year. Adjusted operating margin contracted 10 bps to 5%.
Balance Sheet & Cash Flow
As of Jul 1, 2023, Plexus had cash & cash equivalents worth $252.9 million compared with $269.7 million as of Apr 1, 2023.
As of Jul 1, 2023, PLXS had long-term debt and finance lease obligations, net of the current portion of $187.5 million compared with $188.7 million as of Apr 1, 2023.
In the quarter under review, the cash flow from operations was $18.8 million. Plexus reported a free cash outflow of $11.5 million.
PLXS repurchased shares worth $13.5 million at an average price of $90.49 per share in the fiscal third quarter. It has shares worth $9.1 million left under its existing $50 million share repurchase authorization.
Guidance
For fourth-quarter fiscal 2023, revenues are projected to be between $1.00 billion and $1.04 billion.
GAAP operating margin is expected to be between 4.7% and 5.2%. GAAP EPS is expected to be in the range of $1.18-$1.36.
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 InterDigital IDCC, Badger Meter BMI and Woodward WWD. InterDigital and Badger Meter presently sport a Zacks Rank #1 (Strong Buy), while Woodward currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for InterDigital’s 2023 EPS has increased 0.1% in the past 60 days to $8.08. The company’s long-term earnings growth rate is 13.9%.
InterDigital’s earnings beat estimates in all the trailing four quarters, delivering an average surprise of 170.9%. Shares of IDCC have rallied 53.9% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 EPS has increased 4.8% in the past 60 days to $2.82.
Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 6.7%. Shares of BMI have surged 80.5% in the past year.
The Zacks Consensus Estimate for Woodward’s fiscal 2023 EPS has increased 0.8% in the past 60 days to $3.61.
WWD’s long-term earnings growth rate is 13.5%. Shares of WWD have gained 20.2% in the past year.
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