Yahoo Finance Plexus Corp (PLXS) Q2 2024 Earnings Call Transcript Highlights: Strong Performance and ...
Revenue: $967 million for fiscal Q2, with guidance of $960 million to $1 billion for fiscal Q3.
Net Income: Not directly mentioned, but related to non-GAAP diluted EPS.
Earnings Per Share (EPS): Non-GAAP EPS of $0.94 for fiscal Q2, with Q3 guidance of $1.22 to $1.37.
Free Cash Flow: $65 million for fiscal Q2, with an increased forecast of approximately $100 million for fiscal 2024.
Gross Margin: 9.1% for fiscal Q2, with Q3 expected to be between 9.3% to 9.7%.
Operating Margin: Non-GAAP operating margin of 4.2% for fiscal Q2, with Q3 guidance of 5.2% to 5.6%.
Market Capitalization: Not mentioned in the transcript.
Same-Store Sales: Not applicable as Plexus does not operate retail locations.
Store Locations: Not applicable as Plexus is a manufacturing services company.
Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss the current state of the industrial segment, particularly in relation to semi-suppliers and communication improvements? A: Todd Kelsey, Plexus Corp - Independent Director, noted improvements in the SemiCap sector, attributing gains to market share and modest market improvements. He mentioned early positive momentum in communications as well. Oliver Mihm, Executive Vice President and COO, added that other industrial subsectors like electrification and automation are experiencing muted outlooks due to inventory corrections.
Q: Are the delays in the industrial programs related to fab pushouts? A: Todd Kelsey confirmed that the delays in industrial programs correlate with fab deployment delays, impacting the timing of demand and program ramp-ups.
Q: How is the Engineering Services sector performing, especially in light of recent restructuring actions? A: Todd Kelsey highlighted improvements in demand for engineering solutions, with new program wins that could lead to further phases. He emphasized the diversification within the engineering funnel across various sectors as a positive development. Patrick Jermain, EVP and CFO, noted that the benefits of restructuring actions would be more fully realized in future quarters.
Q: What are the expectations for free cash flow beyond this fiscal year, given the significant improvements made? A: Patrick Jermain discussed the current quarter's strong free cash flow performance, driven by inventory management and higher advance payments. He projected continued strong free cash flow for the upcoming quarters and a return to pre-pandemic free cash flow levels in fiscal 2025.
Q: Can you provide an update on the healthcare sector, particularly in light of inventory corrections and performance? A: Oliver Mihm noted that Q2 performance in healthcare was more customer-specific, with certain customers increasing demand and some new program ramps proceeding faster than expected. Todd Kelsey added that inventory corrections in healthcare appear to have stabilized, with expectations of strong growth in fiscal 2025 driven by new program ramps.
Q: What is the current outlook on AI's impact on Plexus's operations and market opportunities? A: Todd Kelsey discussed AI's potential to drive innovation and product development, particularly in healthcare, through faster algorithm development for patient outcomes. He highlighted AI's role in stimulating demand for SemiCap equipment, which would benefit Plexus directly.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
