TORONTO (Reuters) - Contract electronics maker Celestica Inc posted a big quarterly loss on Wednesday as it wrote off all of its remaining goodwill and warned it expects the markets for its products to stay shaky throughout the year.
Chief Executive Craig Muhlhauser told analysts in a conference call that Celestica’s customers are facing declining demand as the state of the economy remains uncertain,
“Today, customer supply chains and the majority of our segments are experiencing demand reductions and volatility, with limited visibility,” he said.
“In our outlook for the coming quarter, we have seen weakness across all market segments beyond normal seasonality, with the consumer segment showing the largest decline.”
Celestica has been pursuing new consumer electronics business to help make up for slumping demand for the telecommunications and information-technology products it makes.
The company, whose customers have included computer giants IBM and Hewlett-Packard, said it lost $822.2 million, or $3.58 a share, in the three months ended December 31. That was worse than the loss of $11.7 million, or 5 cents a share, a year earlier.
The goodwill writeoff resulted in a $850.5 million noncash charge, the company said.
Closely watched adjusted earnings were 26 cents a share, up from 16 cents a share a year earlier, due in part to a lower adjusted tax rate, the company said.
Analysts were expecting earnings of 18 cents a share before one-time items, according to Reuters Estimates.
Revenue in the quarter was $1.94 billion, down from $2.21 billion a year earlier. Still, the result topped analysts’ expectations for $1.84 billion.
The Toronto-based company, which has also produced consumer electronics such as Microsoft Corp’s Xbox 360 video-game console, said that for the first quarter ending March 31, it expects revenue of $1.4 billion to $1.6 billion. It forecast adjusted earnings of 7 cents to 13 cents a share, roughly in line with analysts’ expectations.
Muhlhauser said Celestica, which has laid off more than 9,000 workers since 2005, will continue to clamp down on costs as it faces tough days ahead.
“End markets will eventually recover,” he said, adding the companies that stay disciplined in managing their costs and their cash in the current environment will emerge stronger.
Celestica released its results after markets closed. Its shares rose 2 Canadian cents to close at C$5.31 on the Toronto Stock Exchange on Wednesday.
Reporting by Wojtek Dabrowski; editing by Peter Galloway