Nauman Khan
This article first appeared on GuruFocus.
Celestica (NYSE:CLS) shares surged 15% in premarket trading on Tuesday after the company reported better-than-expected third-quarter results and issued an upbeat 2027 revenue outlook.
Third-quarter revenue climbed 83% year over year to $5.83 billion, topping analyst expectations of $5.47 billion. Adjusted earnings per share more than doubled to $3.30, beating the $2.96 consensus estimate.
Celestica expects 2027 revenue to reach $40 billion, exceeding Wall Street’s $35.71 billion forecast. The company also projected adjusted earnings per share of $21.50 and an adjusted operating margin of 9%, reflecting anticipated demand for AI data center infrastructure.
The company raised its 2026 revenue target to $21 billion from $20.5 billion and increased its adjusted earnings forecast to $11.55 per share from $11.30. However, it cut its free cash flow outlook to $460 million from $600 million, citing working-capital needs to support expansion. Capital spending is expected to reach $1.5 billion to $2 billion in 2027.
Chief Executive Rob Mionis said customer demand forecasts for 2028 had also increased, signaling expectations for continued investment beyond next year.
