Celestica Inc. (TSX: CLS)(NYSE: CLS) announced financial results for the quarter ended September 30, 2019 (Q3 2019).
Q3 2019 Highlights
- Revenue: $1.52 billion, above our Q3 2019 guidance range of $1.4 to $1.5 billion, decreased 11% compared to $1.71 billion for the third quarter of 2018 (Q3 2018).
- Operating margin (non-IFRS)*: 2.8%, above our Q3 2019 guidance of 2.5% at the midpoint of our revenue and non-IFRS adjusted EPS* guidance ranges, compared to 3.3% for Q3 2018.
- Advanced Technology Solutions (ATS) segment revenue**: relatively flat compared to Q3 2018, and represented 37% of total revenue, compared to 33% of total revenue for Q3 2018; ATS segment margin** was 2.8%, compared to 4.6% for Q3 2018 (see Segment Updates below).
- Connectivity & Cloud Solutions (CCS) segment revenue**: decreased 17% compared to Q3 2018, and represented 63% of total revenue, compared to 67% of total revenue for Q3 2018; CCS segment margin** was 2.8%, compared to 2.7% for Q3 2018.
- IFRS earnings (loss) per share: $0.05 loss per share, compared to $0.06 earnings per share for Q3 2018.
- Adjusted EPS (non-IFRS)*: $0.13 per share, above the midpoint of our Q3 2019 guidance range of $0.09 to $0.15 per share, compared to $0.26 per share for Q3 2018. Adjusted EPS for Q3 2019 and Q3 2018 included a $0.02 and $0.03 per share negative impact, respectively, resulting from taxable foreign exchange (see Guidance Summary and Q4 2019 Outlook below).
- Adjusted return on invested capital (non-IFRS)*: 10.1%, compared to 16.2% for Q3 2018.
- Free cash flow (non-IFRS)*: $66.2 million, compared to $24.6 million for Q3 2018.
“Celestica delivered solid third quarter results with revenue and non-IFRS operating margin above our expectations, and another quarter of strong free cash flow,” said Rob Mionis, President and CEO.
“While our ATS segment continues to be impacted by softness in our capital equipment business, our CCS segment delivered sequential and year over year segment margin improvement, driven by our cost efficiency initiatives and improved mix, supported by our CCS portfolio review.”
“We believe the actions we are taking are strengthening our company. We remain focused on driving productivity, successfully ramping new programs and diversifying our revenue mix to improve profitability and deliver strong and consistent financial returns over the long term.”