Celestica Q4 Earnings In-Line With Estimates, Revenues Rise Y/Y

Celestica Inc. CLS recorded relatively modest fourth-quarter 2024 results, wherein adjusted earnings matched the Zacks Consensus Estimate while revenues missed the same. Find the latest EPS estimates and surprises on Zacks Earnings Calendar.The Toronto-based electronics manufacturing service provider reported revenue growth year over year, backed by stronger-than-expected growth in the Connectivity & Cloud Solutions (CCS) segment. Management’s strong emphasis on innovation, product diversification and AI advancements are key growth drivers. Strong growth in adjusted free cash flow is a tailwind. Net IncomeQuarterly net earnings were $151.7 million or $1.29 per share, up from $91.6 million or 77 cents per share in the year-ago quarter. Growth in GAAP earnings was primarily attributed to top-line expansion.Non-GAAP net earnings improved to $130.2 million or $1.11 per share from $92.1 million or 77 cents per share in the year-ago quarter. The bottom line aligned with the Zacks Consensus Estimate.For 2024, GAAP net income was $428 million or $3.61 per share compared with a net income of $244.4 million or $2.03 per share in 2023. Non-GAAP net income for 2024 was $460.8 million or $3.88 per share compared with a net income of $295.8 million or $2.46 per share in 2023.Celestica, Inc. Price, Consensus and EPS Surprise Celestica, Inc. price-consensus-eps-surprise-chart | Celestica, Inc. QuoteRevenueQuarterly revenues were $2.55 billion, up 19% from $2.14 billion in the year-ago quarter. The healthy demand in the CCS segment cushioned the top line. However, revenues missed the Zacks Consensus Estimate of $2.6 billion. For 2024, revenues improved to $9.65 billion from $7.96 billion in 2023.Quarterly Segment ResultsCCS: Total revenues in this segment improved to $1.74 billion from the year-ago quarter’s figure of $1.34 billion. The 30% increase was primarily driven by strong demand in the communication end market. The segment accounted for 68% of the company’s total revenues in the fourth quarter.Revenues in the Enterprise end market declined 10% year over year in the fourth quarter. The Communications end market reported revenue growth of 64%, with solid growth in the hardware platform solutions portfolio backed by hyperscaler customer demand for networking products, including 400G switches and 800G switches.The segment’s operating income increased to $136.6 million with a margin of 7.9%, driven by greater operating leverage and improved mix.Advanced Technology Solutions (ATS): This segment’s revenues remained relatively flat at $805.8 million, accounting for 32% of total revenues in the fourth quarter. The segment’s operating income decreased to $37 million from $37.7 million with a margin of 4.6% (down from 4.7%) due to lower operating leverage in the industrial end market, partially offset by an improvement in capital equipment and Aerospace and Defense business.Cash Flow & LiquidityIn the fourth quarter, Celestica generated an operating cash flow of $143.4 million compared with $118 million in the year-ago quarter. Adjusted free cash flow was $95.8 million in the fourth quarter compared with $86.1 million in the prior-year period.As of Dec. 31, 2024, the company had $423.3 million in cash and cash equivalents with a long-term debt of $770.2 million compared with $370.4 million and $648.3 million in the year-ago period.Guidance UpFor the first quarter of 2025, Celestica expects revenues in the range of $2.475-$2.625 billion. Non-GAAP earnings per share are expected to be in the range of $1.06-$1.16. Management expects the non-GAAP operating margin to be 6.8%.For 2025, the company anticipates revenues of $10.7 billion, up from the previous projection of $10.4 billion. Non-GAAP operating margin is expected to be 6.9%, up from the previous outlook of 6.7%. Non-GAAP adjusted earnings are expected to be $4.75 per share, up from the previous outlook of $4.42 per share. Adjusted free cash flow is expected to be $350 million, up from the previous outlook of $325 million. Non-GAAP adjusted effective tax rate is forecasted to be approximately 19%.CLS’ Zacks RankCelestica currently sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Upcoming ReleasesZillow Group, Inc. ZG is scheduled to release fourth-quarter earnings on Feb. 11. The Zacks Consensus Estimate for earnings is pegged at 34 cents per share, indicating growth of 50% from the year-ago figure. Pinterest, Inc. PINS is scheduled to release fourth-quarter 2024 earnings on Feb. 6. The Zacks Consensus Estimate for earnings is pegged at 63 cents per share, indicating growth of 18.9% from the year-ago figure. Light and Wonder LNW is scheduled to release fourth-quarter earnings on Feb. 25. The Zacks Consensus Estimate for earnings is pegged at $1.08 per share, indicating growth of 47.95% from the year-ago figure.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Celestica, Inc. (CLS): Free Stock Analysis Report Zillow Group, Inc. (ZG): Free Stock Analysis Report Pinterest, Inc. (PINS): Free Stock Analysis Report Light & Wonder, Inc. (LNW): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks