Plexus shares rise on investor optimism about 2013

Shares of Plexus rise on optimistic outlook for fiscal 2nd-qtr despite loss of key customer

Associated Press

NEW YORK (AP) -- Plexus shares rose Thursday after the supply chain provider issued a positive outlook for the current quarter despite the upcoming loss of a key customer.

THE SPARK: In releasing its fiscal first-quarter results, which fell short of average analysts' predictions, Plexus said late Wednesday that it expects to post a profit for the current quarter of between 50 cents and 55 cents per share. Revenue is expected to total between $550 million and $580 million.

Analysts polled by FactSet expect earnings of 53 cents per share on $561.4 million in revenue.

THE BIG PICTURE: The Neenah, Wis.-based company said the guidance reflects higher revenue from its supply agreements with Juniper Networks Inc., which are set to end this year.

Since being notified by the data network equipment maker in November that it was being dropping as a supplier, Plexus has focused on cutting costs and drumming up new business. Business from Juniper, its largest customer, accounted for about $370 million in revenue in fiscal 2012, about 16 percent of Plexus Corp.'s revenue.

Plexus President and CEO Dean Foate said Wednesday that the company has set goals of working its way back to flat revenue in fiscal 2013 and posting "modest" revenue growth in fiscal 2014.

THE ANALYSIS: Raymond James analyst Brian Alexander called the 2013 revenue goal "aggressive," noting that it implies steep increases in non-Juniper revenue this year.

Alexander, who backed his "Market Perform" rating for the stock, said that along with the company's prediction of only a slight drop in profitability, the 2013 outlook "could lead to disappointment down the road."

THE SHARES: Up 99 cents, or 3.9 percent, to $26.07 in midday trading, after peaking at $27.36 earlier in the day. Over the past 52 weeks, the company's shares have traded between $19.63 and $38.50.

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