Celestica Inc (NYSE:CLS) stock rose 5.34% (As on October 28, 11:23:34 AM UTC-4, Source: Google Finance) after the company reported third-quarter earnings that surpassed analyst expectations, driven by robust demand for AI data center infrastructure. Celestica’s Connectivity & Cloud Solutions segment was particularly strong, with revenue increasing 43% YoY to $2.41 billion, while the segment margin improved to 8.3% from 7.6% a year earlier. This growth is further bolstered by the successful ramp-up of switch programs, highlighting the company’s agility in responding to market needs and its robust supply chain management. The company achieved an adjusted operating margin of 7.6% in Q3, compared to 6.8% in the same period last year. The company also announced plans to launch a new Normal Course Issuer Bid, which would allow it to repurchase up to 5% of its public float over the next twelve months. Net earnings also saw a substantial rise to $267.8 million, up from $89.5 million year-over-year.

CLS in the third quarter of FY25 has reported the adjusted earnings per share of $1.58, beating the analysts’ estimates for the adjusted earnings per share of $1.47. The company had reported the adjusted revenue growth of 28 percent to $3.02 billion in the third quarter of FY25, beating the analysts’ estimates for revenue of $2.50 billion. In Q3 2025, three customers in the CCS segment represented 10% or more of total revenue, with one customer alone accounting for 30%.

Celestica’s strong performance prompted management to raise its full-year outlook. The company now expects 2025 revenue of $12.2 billion, up from its previous guidance of $11.55 billion, and adjusted EPS of $5.90, increased from $5.50 previously. For the fourth quarter, Celestica forecasts revenue between $3.325 billion and $3.575 billion, well above the consensus estimate of $3.094 billion. The company expects adjusted EPS of $1.65 to $1.81, compared to analysts’ expectations of $1.52. The demand outlook from the largest customers, who continue to make significant investments in AI data center infrastructure, remains strong, supporting the 2026 annual outlook with indications of these dynamics continuing into 2027. The company also introduced its 2026 annual outlook, projecting revenue of $16.0 billion and adjusted EPS of $8.20, representing growth of 31% and 39% respectively. For fiscal 2025, the company expects Non-GAAP free cash flow of $425 million (previous outlook $400 million) and for fourth quarter the company expects Non-GAAP free cash flow of $500 million. Celestica plans to launch a new Normal Course Issuer Bid (NCIB) to enhance shareholder value.