NEW YORK (AP) — Celestica Inc.'s net income fell 48 percent in the second quarter as it prepares for the end of its relationship with Research In Motion Ltd., for which it had assembled BlackBerry phones.
The Canadian company, which makes electronics for other businesses, said Friday that it now expects a revenue decline for fiscal 2012, citing the RIM action and overall weakening demand.
RIM's deteriorating business has put pressure on its suppliers, including Celestica. Its outlook for the current quarter was mostly below analyst expectations, although revenue was in line with Wall Street predictions.
Celestica is winding down its manufacturing services for RIM this year. That cost it $20.1 million in restructuring charges in the April-June quarter, and Celestica expect total charges will come to $40 million to $50 million for the year.
The BlackBerry seller made up 17 percent of Celestica's revenue in the period, and the company expects that to drop to 10 percent this quarter.
Celestica is now focusing on diversifying its customer base, said CEO Craig Muhlhauser. To that end, the company said Friday that it bought D&H Manufacturing Co., which makes parts primarily used in chip-making, for about $70 million. The deal is expected to close by the end of September.
From April through June, Celestica earned $23.6 million, or 11 cents per share. A year ago it earned $45.7 million, or 21 cents per share.
Earnings were 22 cents per share when excluding charges tied to the Research in Motion separation, stock-based compensation and other items. Analysts polled by FactSet expected profit of 24 cents per share.
Revenue for the three months ended June 30 dropped 5 percent to $1.74 billion from $1.83 billion. Analysts expected $1.69 billion.
For the current quarter, Celestica expects adjusted earnings of 17 cents to 23 cents per share on revenue of $1.6 billion to $1.7 billion. Analysts predict earnings of 24 cents per share on revenue of $1.68 billion.
The company also expects a revenue decline for the year, but didn't name a specific number. Analysts had predicted $6.78 billion, a 6 percent decrease from 2011's $7.21 billion.
Shares added 6 cents to $7.37 in midday trading.
