3 Min Read
* Sees fourth-quarter revenue $1.43-$1.53 bln
* Sees oper margins 2 pct to 2.5 pct in first half of 2013
* To buy back $175 million in shares in fourth quarter
* Third-quarter revenue $1.58 mln vs est $1.65 bln
Oct 23 (Reuters) - Contract electronics manufacturer Celestica Inc's reported a 13 percent lower third-quarter profit on weaker demand across its segments and said it expects margins to come under pressure in the first half of 2013.
The company said it expects operating margins to be in the range of 2 percent to 2.5 percent for the period.
"This was a bit of a surprise for the market as that would imply a sequential drop from the roughly 3 percent (operating margin) they are guiding to for the fourth quarter," Paradigm Capital Inc analyst Gabriel Leung said.
The company said based on current customer forecasts and overall uncertainty in its end markets, it anticipates the first half of 2013 to remain challenging with continuing downward margin pressures.
Celestica forecast an adjusted fourth-quarter profit of 15 cents per share to 21 cents per share and revenue of $1.43 billion to $1.53 billion.
It also said it will buy back $175 million of shares during the fourth quarter.
Celestica makes smartphones, servers and some other products for branded manufacturers such as RIM, IBM Corp and Cisco Systems Inc.
It had said in June that it would stop making products for Research In Motion Ltd, its biggest customer at the time, by the end of 2012 and expected restructuring charges of between $40 million and $50 million.
Celestica took a charge of $8.3 million in the third quarter and said the restructuring program will continue into 2013.
Net income for the third quarter fell to $43.7 million, or 21 cents a share, from $50.2 million, or 23 cents per share, a year earlier.
On an adjusted basis, it earned 26 cents.
Revenue fell 14 percent to $1.58 billion.
Analysts on average expected the company to earn 20 cents per share on revenue of $1.65 billion, according to Thomson Reuters I/B/E/S.
Sales at its communications business, which contributed 37 percent to total revenue, was down 9 percent as demand declined from a number of customers, Chief Financial Officer Paul Nicoletti said on a conference call with analysts.
Third-quarter revenue from services to RIM accounted for under 10 percent of total revenue, down from 17 percent in the second quarter, the company said.
Shares of Celestica, which has a market value of C$1.32 billion, closed at C$7.08 on the Toronto Stock Exchange. Its New York Stock Exchange-listed shares were trading down 0.3 percent at $7.00 after the bell on Tuesday.