Q2 2024 Celestica Inc Earnings Call Transcript
Key Points
- Celestica Inc (CLS) achieved revenues of $2.39 billion and adjusted EPS of $0.91, both exceeding the high-end of their guidance ranges.
- The CCS segment saw a 51% year-over-year increase in revenues, driven by strong demand from hyperscale customers.
- Adjusted free cash flow for the quarter was $63 million, bringing the year-to-date total to $129 million.
- Non-IFRS operating margin improved to 6.3%, an increase of 80 basis points over the prior-year period.
- The company raised its annual outlook for 2024, now anticipating revenue of $9.45 billion and adjusted EPS of $3.62, representing growth of 19% and 49%, respectively, compared to 2023.
- ATS segment revenues were down 11% year-over-year, driven by continued softness in the industrial business.
- Despite the overall positive performance, the ATS segment margin decreased by 20 basis points compared to the prior-year period.
- Inventory balance at the end of the second quarter was $1.85 billion, indicating a significant amount of capital tied up in inventory.
- The company is experiencing a technology transition in its AI compute servers, which may lead to a temporary decline in enterprise revenue.
- Gross debt at the end of the second quarter was $750 million, resulting in a net debt position of $316 million.
Good morning, ladies and gentlemen, and welcome to the Celestica Q2 2024 Earnings Call. (Operator Instructions) This call is being recorded on Thursday, July 25, 2024.
I would now like to turn the conference over to Craig Oberg, Vice President of Investor Relations and Corporate Development. Please go ahead.
Good morning, and thank you for joining us on Celesticaâs second quarter 2024 earnings conference call. On the call today are Rob Mionis, President and Chief Executive Officer, and Mandeep Chawla, Chief Financial Officer.
Please note that during the course of this call, we will make statements related to the future performance of Celestica that contain forward-looking information. While these forward-looking statements represent our current judgment, actual results could differ materially from a conclusion, forecast or projection in the forward-looking statements made today. Certain material factors and assumptions are applied in drawing any such statement.
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