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It has been about a month since the last earnings report for Plexus (PLXS). Shares have lost about 8.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Plexus due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Plexus' Q1 Earnings Top Estimates
Plexus reported first-quarter fiscal 2025 adjusted earnings per share (EPS) of $1.73, up 40.7% year over year. The figure outpaced the Zacks Consensus Estimate of $1.59 per share.
Revenues of $976.1 billion declined 0.7% year over year and missed the Zacks Consensus Estimate by 0.8%. Management expected revenues to be between $960 million and $1 billion.
The top-line performance was affected by weakness in Healthcare/Life Sciences and Aerospace/Defense sectors.
In the reported quarter, revenues from the Americas and Europe, the Middle East and Africa declined 11.6% and 16.5%, respectively. Revenues from Asia-Pacific jumped 9.8% to $607 million.
In the fiscal first quarter, Plexus won 30 manufacturing programs, which are estimated to contribute $212 million in annualized revenues once fully ramped into production.
Market Sector Details
Industrial sector’s revenues rose 1.6% year over year to $442 million, mainly due to higher near-term demand with various customers. This contributed 46% to total revenues. However, management also noted that demand instability across broader industrial sectors is offsetting gains in the semiconductor capital equipment vertical.
Owing to demand softness, Healthcare/Life Sciences’ revenues declined 1.8% from the year-ago quarter’s levels to $374 million. This contributed 38% to total revenues.
Revenues from Aerospace/Defense declined 4.2% year over year to $160 million. This contributed 16% to total revenues. Reductions in commercial-aerospace production rates and defense-program ramp delays were major headwinds, affecting segmental performance.
The company’s top 10 customers accounted for 51% of net revenues in the fiscal first quarter.
Operating Details
Gross profit on a GAAP basis increased 14.2% year over year to $100.7 million. Gross margin was 10.3% from 9% year over year.
Selling and administrative expenses increased 14.2% from the year-ago quarter’s actuals to $49.1 million.
Adjusted operating margin expanded 90 basis points to 6%.
Balance Sheet & Cash Flow
As of Dec. 28, 2024, Plexus had cash & cash equivalents worth $317.2 million compared with $345.1 million as of Sept. 28.
As of Dec. 28, 2024, Plexus had long-term debt and finance lease obligations, net of the current portion of $88.7 million compared with $90 million as of Sept. 28.
For the quarter under review, cash flows from operations was $53.6 million. Plexus reported a free cash flow of $27 million.
The company repurchased $12.8 million of its shares at an average price of $151.19 per share under Plexus’ repurchase program. Plexus has $37.2 million available under its existing $50 million buyback authorization.