* Plexus recently announced 11 new program wins. Two of the wins are from new customers. The Company also reported double-digit gross margins that are likely to encourage some customers to request transition price concessions. Plexus continues to make headway into emerging; non-traditional, higher-margin, outsourcing end-markets. Plexus is increasing capital expenditures in certain regions in Asia to enhance service offerings in the region.
* Celestica’s recent quarter release was not as positive as some would have hoped. The Company seems to have a long way to go before reaching its 3.5% operating margins goal targeted for Q4. Meanwhile, company restructuring activity may be holding the Company back (restructuring rate and pace are both behind schedule) and progress-to-date has not yielded many noticeable savings.
* Sanmina-SCI’s restructuring is yielding some noticeable benefits. The Company recently reported higher margins and improving efficiencies. Demand with its PCB and backplane businesses is good. However, the Company’s revenue growth is negative and its PC business and enclosures are experiencing difficulty.
* Benchmark Electronics reported new program wins with telecom and medical OEMs. The Company also seemed to do a considerable percentage of its business this past quarter during the quarter’s last month resulting in poorer working capital management metrics performance and other inefficiencies driven by employee overtime and higher freight and logistics costs to help meet customer shipment requirements. Company top and bottom-line growth remains sound.
VentureOutsource.com, May 2006
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