Diversified stock to watch: Plexus Corp. (NASDAQ: PLXS)

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Plexus Corp. (NASDAQ: PLXS) stock rose over 5.6% on 23rd January, 2020 (as of 10:01 am GMT-5; Source: Google finance) after the company posted better than expected results for the first quarter of FY 20. The company’s healthcare/Life Sciences sector exceeded the expectations coming into the quarter as the team responded to increased demand from several of the customers.  The Industrial/Commercial sector was exceptionally strong as the company capitalized on further strengthening in the semiconductor capital equipment sub-sector.  The global teams continue to prioritize operational excellence, and through that focus delivered fiscal first quarter operating margin of 4.7%.

Moreover, during the fiscal first quarter, the company had generated $61 million in free cash flow.  Compared to the prior year fiscal first quarter during which the company had cash outflows of $58 million, this quarter’s strong result positions the company well to generate over $100 million in free cash flow for fiscal 2020.

PLXS in the first quarter of FY 20 has reported the adjusted earnings per share of $1, beating the analysts’ estimates for the adjusted earnings per share of 93 cents. The company had reported the adjusted revenue growth of 11 percent to $852.41 million in the first quarter of FY 20, beating the analysts’ estimates for revenue by 6.36%.

Meanwhile, during the first quarter, the company had won 30 manufacturing programs, which represents $167 million in annualized revenue when fully ramped into production

The trailing four quarter wins were total $843 million in annualized revenue when fully ramped into production. The company had purchased $6.3 million of the shares at an average price of $69.82 per share under the existing share repurchase program.

For the second quarter 2020, the company expects revenue to be in the range of $790 to $830 million, GAAP diluted EPS, excluding any non-recurring charges is expected to be in the range of $0.80 to $0.90,  Gross margin is expected to be in the range of 8.8% to 9.2%, SG&A is expected to be in the range of $38.0 to $39.0 million, Operating margin is expected to be in the range of 4.0% to 4.5%, Depreciation and amortization to be approximately $15 million, Non-operating expenses is expected to be in the range of $4.6 to $5.0 million, Effective tax rate is expected to be in the range of 13% to 15% Diluted weighted average shares outstanding to be about 30 million and Cash cycle days is expected to be in the range of 75 to 79 days.

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