Plexus Corp. (PLXS), a provider of contract electronic manufacturing services, Wednesday reported a slight rise in profit for the first quarter of fiscal 2010, reflecting better margins, lower operating expenses and tax rate which more than offset the impact of the decline in revenue. Earnings came in well ahead of Street view. The company also provided guidance for the second quarter of fiscal 2010. Following the results, PLXS shares are trading more than 5% in the after hours.
The Neenah, Wisconsin-based company's net income for the first quarter slightly improved to $17.84 million or $0.44 per share from $17.04 million or $0.43 per share in the previous year. Previous-year results include restructuring costs of $0.55 million.
On an adjusted basis, net income for the quarter was $17.84 million or $0.44 per share, compared to $17.53 million or $0.44 per share a year ago. On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.34 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter declined to $430.40 million from $456.11 million a year ago, while analysts expected revenues of $422.29 million.
By market sector, Wireline/Networking revenues were about $202 million and Wireless Infrastructure revenues were about $49 million. Medical and Industrial/Commercial revenues were about $79 million and $64 million, respectively. Defense/Security/Aerospace revenues were $36 million for the first quarter.
The company noted that its earnings for the first quarter were favourable impacted by a settlement funds amounted to $3.2 million which was recorded as a reduction to cost of sales, lower tax rate and less than expected stock option expense.
Cost of sales declined to $385.86 million from $409.56 million last year. Gross profit was $44.54 million, compared to $46.55 million in the previous year.
Total operating expenses declined to $24.32 million from $25.82 million a year ago. Interest expense declined to $2.56 million from $2.93 million last year.
Income tax expense for the quarter were $0.18 million, compared to $1.89 million in the previous year.
Looking forward, the company expects earnings in the range of $0.44 to $0.52 per share on revenues in the range of $470 million to $495 million for the second quarter.
Analysts expect the company to post earnings of $0.31 per share, on revenues of $423.90 million for the second quarter.
The company anticipates sequential revenue growth to continue in the third and fourth fiscal quarters, while the rate of revenue growth to be moderate in comparison to the growth rate implied by the second quarter guidance.
PLXS closed Wednesday's regular trading at $28.98, up 0.25 or 0.87%, on a volume of 0.75 million shares on the Nasdaq. In after hours, the stock further gained 1.52 or 5.25%, trading at $30.50.
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