Monday, electronic components manufacturer Molex Inc. (MOLX) announced it expects to post a loss for the first quarter, on higher restructuring costs. Concurrently, the company raised its revenue forecast, citing a higher trend in customer orders.
The company noted that it recently announced a mediated settlement, which will result in the closure of a manufacturing facility in Europe. The settlement will now force the company to record higher restructuring costs and, along with other projects, will increase the total program cost compared with previous estimates.
Molex currently anticipates restructuring costs of $270 million - $280 million, higher than the previous estimate of $240 million - $250 million, citing revised severance estimates, redevelopment costs and asset impairments. The impact of restructuring costs is expected to be $0.24 per share, revised from the prior forecast of $0.04 per share.
Consequently, Molex now sees a GAAP loss of $0.12 - $0.08 per share, compared with the prior guidance for earnings of $0.00 - $0.06 per share.
Non-GAAP earnings are expected to be in the range of $0.12 - $0.16 per share, up from the previous outlook of $0.04 - $0.10 per share.
On average, ten analysts polled by Thomson Reuters estimate the company to record earnings of $0.07 a share. Analysts' estimates typically exclude one-time gains and losses.
Molex currently expects first-quarter revenues in the range of $650 million - $665 million, up from the previously projected $590 million - $630 million. The company noted that midpoint of the current range represents a sequential rise of 15%. The consensus of seven analysts for revenue is $615.98 million.
Martin Slark, the chief executive officer of Molex stated, "Customer orders in all key markets have continued to trend higher in the September quarter, leading to the higher outlook for revenue."
Slark added, "At this point, it is impossible to judge whether we are seeing stronger end demand or the impact of temporary factors such as restocking, stimulus packages and pre-Christmas builds."
MOLX is currently trading up $1.30 or 6.39% at $21.66.
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