Q3 2024 Celestica Inc Earnings Call Transcript

Oct 23, 2024 / 09:00PM GMT

Release Date Price: €53 (+2.91%)

Transcript

Key Points

Positve

Celestica Inc (CLS) achieved record quarterly results with revenues of $2.5 billion and adjusted EPS of $1.04, surpassing guidance.
The Connectivity & Cloud Solutions (CCS) segment saw a 42% year-over-year revenue increase, driven by strong demand from hyperscale customers.
The company reported a non-IFRS operating margin of 6.7%, marking a 100 basis point improvement.
Celestica's Hardware Platform Solutions (HPS) business is expected to generate $2.8 billion in revenues, reflecting over 60% growth.
The company anticipates continued strong demand for its networking switches, with 800G solutions gaining traction.

Negative

The Advanced Technology Solutions (ATS) segment experienced a 5% year-over-year revenue decline due to softness in the industrial business.
Celestica's enterprise end market is expected to see a low double-digit percentage revenue decrease due to a technology transition.
The company faces potential pricing pressures in the server business due to strong North American competitors and ODMs.
Inventory levels remain a concern, with cash cycle days increasing by 2 days sequentially.
The ATS segment's growth is expected to be in the low single digits for 2025, below the company's long-term target.

Operator

Good afternoon, ladies and gentlemen, and welcome to the Celestica Q3 2024 earnings call and virtual investor meeting conference call. (Operator Instructions)

This call is being recorded on Wednesday, October 23, 2024. I would now like to turn the conference over to Mr. Craig Oberg, Vice President of Corporate Development and Investor Relations. Please go ahead.

Craig Oberg

Celestica Inc - VP of Investor Relations & Corporate Development

Good evening, and thank you for joining us on Celestica's Third Quarter 2024 Earnings Conference Call and 2024 Virtual Investor Meeting. On the call today are Rob Mionis, President and Chief Executive Officer; Mandeep Chawla, Chief Financial Officer; Jason Phillips, President of our Connectivity & Cloud Solutions segment; and Todd Cooper, President of our Advanced Technology Solutions segment. Joining us on the Q&A portion of our call will be Stephen Dorwart, SVP of our Hyperscalers and Service Provider business.

Today's call will begin with a review of our third quarter financial results, our

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