Two electronics contract manufacturers saw their shares flirt with buy points Thursday after they reported upbeat results for the September quarter. Flex and Plexus each hit 52-week highs on the news, though Plexus ended up in the red.
Both companies delivered beat-and-raise quarterly reports late Wednesday.
San Jose, Calif.-based Flex trounced Wall Street's estimates for its fiscal second quarter ended Sept. 30. Flex earned an adjusted 63 cents a share on sales of $7.77 billion. Analysts had predicted earnings of 51 cents a share on sales of $7.21 billion. On a year-over-year basis, Flex earnings rose 31% as sales increased 25%.
For the current quarter, Flex forecast earnings of 60 cents a share on sales of $7.5 billion. That's based on the midpoint of its outlook. Wall Street had predicted earnings of 55 cents on sales of $7.26 billion. In the year-earlier period, Flex earned 50 cents a share on sales of $6.62 billion.
Flex Stock Nears Buy Point
On the stock market today, Flex stock rose 3% to close at 19.03. Earlier in the session, it climbed as high as 19.68. Flex stock has been consolidating for the past seven weeks with a buy point of 19.73, according to IBD MarketSmith charts.
"Looking ahead, the secular tailwinds that support our strategy remain in our favor," Chief Executive Revathi Advaithi said in a news release. Those tailwinds include growth opportunities in electric vehicles, industrial automation and medical devices.
For its full fiscal 2023, Flex predicted adjusted earnings of $2.28 a share on sales of $29.6 billion. That's based on the midpoint of its outlook. Wall Street had been looking for earnings of $2.16 a share on sales of $28.95 billion.
Plexus Smashes Views
Meanwhile, Neenah, Wis.-based Plexus smashed analyst estimates for its fiscal fourth quarter ended Oct. 1. It earned $1.78 a share on sales of $1.12 billion. Analysts were expecting earnings of $1.27 a share on sales of $1.01 billion. On a year-over-year basis, earnings jumped 53% as sales climbed 33%.
For the current quarter, Plexus predicted earnings of $1.49 a share on sales of $1.11 billion. That's based on the midpoint of its guidance. Wall Street was looking for earnings of $1.24 a share on sales of $1.01 billion.
"Our funnel of qualified manufacturing opportunities remains at a record $3.4 billion, while quarterly new manufacturing program wins totaled $214 million," Chief Executive Todd Kelsey said in a news release. "Included in these wins is an exciting opportunity with a new customer in vehicle, truck and bus electrification, building upon our existing presence in this secular growth market."
In Plexus' fiscal fourth quarter, industrial customers accounted for 46% of revenue. The company's health care and life sciences business made up 42% of sales. Aerospace and defense customers provided the remaining 12% of revenue.
Plexus stock initially surged 4% higher but ended the day down 0.7% to close at 95.92. For the past two days, Plexus stock has been flirting with a buy point of 98.10 out of a cup-with-handle base, MarketSmith charts show.
Flex Stock Ranks First In Hot Group
Flex stock is tied for first place in IBD's electronics contract manufacturing industry group, according to IBD Stock Checkup. It shares a best-possible IBD Composite Rating of 99 with Sanmina. Plexus ranks seventh in the group with a Composite Rating of 95.
The electronics contract manufacturing group ranks a strong No. 12 out of 197 industry groups that IBD tracks.
Flex stock is one of six stocks from the group on IBD's Tech Leaders list. Sanmina and Plexus are also on the list.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
