Strong demand for communications and server products elevated Celestica Inc.'s net income 218% during the fourth quarter of 2000 and boosted the company's year-end profits to record levels.
For the quarter, which ended Dec. 31, the Toronto-based EMS company reported net income of $83.4 million, or 38 cents a share, compared with $26.2 million, or 14 cents a share, in the year-ago quarter. Revenue in the recent quarter jumped 114% to $3.44 billion, compared with $1.60 billion in the corresponding year ago quarter.
For the full year, Celestica's net income soared 1,242% to $217.5 million, or 99 cents a share, compared with $16.2 million, or 40 cents a share, in fiscal 1999. The year brought Celestica revenue that improved 84% to $9.75 billion compared with $5.29 billion in the year ago period.
"Our revenue growth was robust," said Eugene Polistuk, Celestica's president and chief executive during a conference call with analysts. "Organically, we grew in excess of 50% in all geographies."
Polistuk attributes the EMS company's strong quarter to its diversified product mix and multiple programs with top 10% customers such as IBM Corp and Sun Microsystems. Despite market softness that certain OEMs experienced in the quarter, Celestica managed to hit its revenue target of $10 billion for 2000 with year-end revenue of $9.75 billion.
"Celestica's position in the near term is to have revenue between $12.5 billion and $13 billion in 2001 -- without acquisitions," said Tony Puppi, Celestica's chief financial officer. The company anticipates revenue of $20 billion by 2003.
And despite the tight market for certain components, Polistuk said, Celestica pulled through with increased sales of $200 million in the fourth quarter as hard-to-find ASICs materialized. Thomas Hopkins, an analyst at Bear, Stearns & Co. in New York said those ASICs helped the EMS company "complete incomplete kits."
Said Polistuk, "As the company moves forward, we see ongoing strength in outsourcing as customers look to optimize their manufacturing solutions and leverage Celestica's strong global supply chain and advanced technology capabilities."