Plexus Corp. has lowered its fiscal third quarter revenue and profit estimates due to production problems at one of its factories and unanticipated weakness in demand from customers in the networking and communications equipment market.
The Wisconsin-based electronics manufacturing services (EMS) provider said it now projects revenue for the quarter ended July 4 will be approximately $670 million compared with its previous forecast of between $670 million and $700 million. Earnings per share for the 3-month period will be in the range of 67 cents to 70 cents, the company said. Its prior forecast was for net income to be in the range of 71 cents to 79 cents per share.
"Our preliminary results are a consequence of unanticipated challenges we faced during the quarter,” said Dean Foate, chairman, president and CEO of the contract manufacturer, in a statement. “The most significant issue affecting the quarter was a production process constraint in one of our Defense/Security/Aerospace focus factories that limited our ability to complete product shipments late in the quarter. Further, in the final weeks of the quarter customer demand softened in our Networking/Communications sector resulting in forecast de-commitments while our Healthcare/Life Sciences sector demand was weaker than our already projected soft expectations."
While revenue for the just ended quarter are now expected to trail Plexus’ initial projection they will still increase strongly from the year-ago quarter when the company reported sales of $620.50 million. Earnings per share in the third quarter of fiscal 2014 were higher, though, at 71 cents per share. After slumping in fiscal 2013, the company’s revenue recovered in the fiscal year ended Sept. 27, 2014, rising to $2.4 billion from $2.2 billion.
Analysts polled by Yahoo had until today estimated fiscal 2015 revenue at approximately $2.71 billion with sales strengthening again in fiscal 2016 to $2.95 billion. They are likely to reduce those forecasts based on the recent projection from the company.
The contract manufacturer plans to announce results for the recently-ended quarter on July 22.