Celestica Posts $6B Revenue for FY2016

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Celestica Inc. has announced financial results for the fourth quarter and fiscal year ended December 31, 2016. Fourth quarter revenue was $1.62 billion, above the company's previously provided guidance range of $1.5 to $1.6 billion, and up by 4% sequentially and 7% compared to the fourth quarter of 2015. 

Revenue dollars from its diversified end market were relatively flat compared to the fourth quarter of 2015, and represented 27% of total revenue for the fourth quarter of 2016, compared to 30% of total revenue for the fourth quarter of 2015 as a result of the overall increase in revenue.

For the fiscal year 2016, Celestica has reported revenue of $6 billion, an increase of 7% compared from the $5.6 billion revenue for 2015. Revenue from diversified end market grew 11% to represent 30% of total revenue, compared to 29% of total revenue for 2015.

"Celestica delivered a strong fourth quarter, with growth in revenue of 7% and growth in operating earnings of 16%, compared to the fourth quarter of 2015," said Rob Mionis, Celestica's President and Chief Executive Officer. "Celestica's strong close to the year helped deliver full-year 2016 revenue growth of 7%, 14% growth in operating earnings and over $100 million of free cash flow. Among the many highlights for 2016, we achieved our highest level of operating margins since 2001 and the highest revenue levels since 2012.

"We are proud of our many accomplishments this year. I am pleased with the progress we have made in setting the foundation for our strategy and delivering on our priorities and I am excited about the momentum we are building as we continue to drive profitable growth and increase shareholder value."

Decision to Exit Solar Panel Manufacturing Business and Related Restructuring

Previously disclosed market instability and global oversupply of solar panels continued to negatively impact the company's solar panel manufacturing business, including the pricing and demand for solar panels in the fourth quarter of 2016. Since these negative factors are expected to be prolonged, and the company no longer expect to generate reasonable returns, it made a decision in the quarter to exit the manufacturing of such panels. In connection therewith, the company recorded restructuring charges totaling approximately $21 million in the fourth quarter of 2016 related to the closure of its solar panel manufacturing operations at its two locations, including a $19 million impairment charge to write down the carrying value of its solar manufacturing equipment to recoverable amounts.

The turbulence in the company's solar panel business has negatively impacted its overall energy market offering, and therefore, its diversified end market. However, since Celestica's energy market offering is diverse, and includes the manufacture of inverters, energy storage products, smart meters and other electronic componentry, the company remain optimistic regarding the outlook of its energy products business, as it continue to win new programs with renewable energy customers.

About Celestica

Celestica is dedicated to delivering end-to-end product lifecycle solutions to drive our customers’ success. Through our simplified global operations network and information technology platform, we are solid partners who deliver informed, flexible solutions that enable our customers to succeed in the markets they serve. Committed to providing a truly differentiated customer experience, our agile and adaptive employees share a proud history of demonstrated expertise and creativity that provides our customers with the ability to overcome complex challenges. For further information about Celestica, click here.