* Q2 adj EPS $0.21 vs forecast $0.19-$0.23
* Revenue up 13.5 percent at $1.59 bln
* Forecasts Q3 adj EPS $0.20-$0.24, rev $1.55-$1.65 bln
* Analysts expected Q3 adj EPS $0.24, rev $1.69 bln
* Stock declines more than 3.7 pct on TSX, NYSE (Adds analyst comments, updates stocks. In U.S. dollars unless noted)
By Susan Taylor
OTTAWA, July 22 (Reuters) - Celestica Inc (CLS.TO) (CLS.N) reported quarterly results on Friday in line with estimates, but shares of the contract electronics manufacturer fell after it forecast an unexpectedly weak third quarter, saying that a slew of new business will take time to kick in.
Celestica, which counts BlackBerry maker Research In Motion RIM.TO RIMM.O as its biggest customer, also announced a modest healthcare acquisition and share buyback plan.
Shares of Celestica, spun off from IBM Canada in 1996, dropped more than 3.7 percent on Friday to C$9.06 on the TSX and $8.72 in New York.
"For the short term (forecast), and that's just looking at the extremely short-term, 90-day window, it is a little bit underwhelming versus expectations," Longbow Research analyst Shawn Harrison said.
"I think people are just concerned about taking a bet on the December (fourth) quarter ramp, knowing that you have this overlay of macroeconomic uncertainty."
The Toronto-based company, one of the five largest contract electronics manufacturers in the world, said it won new orders during the second quarter across its consumer, computing, industrial and after-market service units.
"We are winning new programs. We expect these wins will start contributing to further revenue growth in the fourth quarter and beyond," Chief Executive Craig Muhlhauser said on a conference call with analysts.
A new, exclusive contract in the computer server market will require the transfer of production work from other manufacturers, which Celestica said will take longer than it expected. Manufacturing is seen ramping up late in the third quarter, with production transfers complete by the first quarter of 2011.
Several business wins in the consumer product segment are also seen ramping up late in the third quarter, with target volumes reached in the fourth quarter.
The company won contracts with four new customers in its industrial and defense markets, and said manufacturing is seen reaching target volumes in 2011.
"We see stable end market demand across all segments of the business, which is reflected in our Q3 guidance," Muhlhauser said.
For its upcoming third quarter, Celestica forecast adjusted earnings per share of 20 cents to 24 cents and revenue ranging from $1.55 billion to $1.65 billion.
Analysts had forecast a third-quarter profit of 24 cents per share before items and revenue of $1.69 billion, according to Thomson Reuters I/B/E/S.
"The next quarter being underwhelming won't be a big deal if the December quarter shakes out to be as strong as they've articulated, which would be double-digit sequential growth," Harrison said.
For the second quarter ended June 30, Celestica posted a net loss of $6.1 million, or 3 cents a share, compared with a net profit of $5.3 million, or 2 cents a share, a year ago.
Adjusted earnings per share increased to 21 cents from 14 cents.
Adjusted profit excludes stock-based compensation, amortization of intangible assets, restructuring and other charges, gains or losses on the repurchase of shares or debt, net of tax adjustment and deferred tax writeoffs or recoveries.
Revenue rose 14 percent to $1.59 billion.
Analysts on average had expected earnings of 21 cents a share, before items, on revenue of $1.57 billion.
Celestica also said it has agreed to buy Austrian-based Allied Panels, a medical engineering and manufacturing service provider. Financial details were not disclosed.
The company announced on Friday that it plans to buy up 9 percent, or 18 million, of its subordinate voting shares in a one-year buyback plan expected to start in the first week of August. ($1=$1.04 Canadian) (With additional reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Anne Pallivathuckal and Jeffrey Hodgson)