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Electronics Production | January 27, 2006

Celestica cuts loss but misses target

EMS provider Celestica announced financial results for the fourth quarter and fiscal year ended December 31, 2005.
Revenue was $2,075 million, compared to $2,333 million in the fourth quarter of 2004. Net loss on a GAAP basis for the fourth quarter was ($28) million, compared to a GAAP net loss for the fourth quarter of 2004 of ($810) million. Included in GAAP net loss for the quarter are charges of $57 million associated with previously announced restructuring plans.

Adjusted net earnings for the quarter were $29 million compared to $43 million for the same period last year. Adjusted net earnings is defined as net earnings before amortization of intangible assets, gains or losses on the repurchase of shares and debt, integration costs related to acquisitions, option expense, option exchange costs and other charges, net of tax and significant deferred tax write-offs (detailed GAAP financial statements and supplementary information related to adjusted net earnings appear at the end of this press release). These results compare with the company's guidance for the fourth quarter, announced on October 20, 2005, of revenue of $1.9 - $2.1 billion and adjusted net.

For 2005, revenue was $8,471 million compared to $8,840 million in 2004. Net loss on a GAAP basis was ($47) million compared to a net loss of ($854) million last year. Adjusted net earnings for the year were $129 million compared to adjusted net earnings of $96 million in 2004.

“Demand in the quarter showed some modest seasonal strength, particularly in our server segment,” said Steve Delaney, CEO, Celestica. “Profitability was adversely affected by the cost of supporting significant transfer activity combined with a late surge in demand in one of our Americas plants. Transition activity continues in the site in the first quarter, but we have deployed the necessary resources to restore efficiencies by the second quarter.”

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