* Q4 adj EPS $0.26 vs $0.21 yr ago; revenue up 13 pct
* Sees Q1 adj EPS $0.20-$0.26
* Expects revenue of $1.73-$1.88 bln
* Buys back 11.4 mln shares for cancellation
* Shares jump 5 percent at open
(Adds detail from conference call, analyst quotes, byline; in U.S. dollars unless noted)
By Alastair Sharp
TORONTO, Jan 27 (Reuters) - Celestica Inc CLS.TO CLS.N reported stronger-than-expected results and offered a bullish outlook on Thursday, as the contract electronics maker handled a wave of orders from top customers like Oracle and Research in Motion.
Shares of the Toronto-based company rose 5 percent after it posted an 18 percent rise in fourth-quarter adjusted quarterly profit and forecast revenue for the current quarter that topped the average forecast. It said earnings would match or exceed what analysts had been expecting.
“We were expecting a robust quarter, we were pleased to see this, and for Q1, it was better than even our bullish thesis was anticipating,” said Todd Coupland, an analyst with CIBC World Markets.
Coupland, who has a “buy” recommendation on the stock, said Celestica was growing faster than peers such as Sanmina-SCI SANM.O and Flextronics FLEX.O.
“They’re clearly beating their peers here from a top-line perspective,” he said. “They’ve paid back all their debt and bought back almost all the stock they can.”
BlackBerry maker Research In Motion RIM.TO accounted for 20 percent of sales in the quarter. All told, its top five customers provided some 55 percent of sales.
Ticonderoga analyst Brian White upgraded the stock to “buy” from “neutral” after the results, saying Celestica boasts a strong balance sheet, improving long-term margins and an accelerating growth rate.
Celestica has a “leading presence in the enterprise hardware market that is benefiting from secular trends in the data center that includes a growing relationship with Oracle,” he said.
Software giant Oracle ORCL.O has moving aggressively into hardware since buying hardware maker Sun Microsystems in January 2010.
Celestica, which was spun off from IBM IBM.N in 1996, has factories across the world, including in China, Malaysia, Thailand, Mexico and Europe. IBM and Cisco CSCO.O are also major customers.
Fourth-quarter adjusted profit rose to $58.3 million, or 26 cents a share, from $49.5 million, or 21 cents, a year earlier. Revenue came in at $1.88 billion.
Analysts had expected earnings of 23 cents a share, on revenue of $1.77 billion.
Celestica’s servers business saw outsized growth to account for 17 percent of revenue, while just under half of sales in the quarter came from consumer and enterprise segments.
Celestica Chief Executive Craig Muhlhauser told analysts on a conference call that solid operating margins and working capital boosted its return on invested capital to nearly 30 percent, an all-time high for Celestica.
The company, one of the five largest contract electronics manufacturers globally, had provided robust 2011 guidance last quarter. At the time it said revenue should grow 10-15 percent as it fills server and smartphone contracts and sees strong orders in its industrial, aerospace and defense unit.
On Thursday, it said it expects to post adjusted earnings of between 20 and 26 cents a share in the first quarter, on revenue of $1.73 billion to $1.88 billion.
Analysts on average had been expecting adjusted earnings of 20 cents a share on revenue of $1.65 billion, according to Thomson Reuters I/B/E/S.
Celestica spent $103 million in its fourth quarter to buy back 11.4 million shares for cancellation, leaving less than a million available for buybacks until August.
Transferring its accounting to International Financial Reporting Standards (IFRS) could trim 7 to 11 cents of pre-tax profit in the current quarter, the company said.
Celestica shares, which have gained more than 25 percent since August, jumped more than 5 percent to $10 in New York and C$9.94 in Toronto. Coupland’s price target is $13. (Additional reporting by Bhaswati Mukhopadhyay; Editing by Frank McGurty)