Key Highlights
- Second-quarter adjusted earnings per share of $2.54 exceeded analyst expectations of $2.29 by 10.92%
- Quarterly revenue reached $4.7 billion, marking a 62% year-over-year increase and surpassing projections by 8.08%
- 2026 annual revenue forecast upgraded to $20.5 billion from the previous $19 billion estimate
- Operating margin achieved an all-time high of 8.2%, representing an 80-basis-point year-over-year expansion
- Company executives highlighted upcoming opportunities with OpenAI, AMD’s Helios technology, and 1.6T networking infrastructure
Shares of Celestica (CLS) advanced 4.52% to $449.49 following the electronics manufacturing services provider’s second-quarter earnings release, which exceeded analyst projections on both the top and bottom lines while raising annual forecasts.
The company posted adjusted earnings of $2.54 per share, surpassing the Street’s consensus of $2.29. Quarterly sales of $4.7 billion beat expectations by 8.08% and represented a 62% jump compared to the year-ago period.
The operating margin climbed to a company record of 8.2%, expanding 80 basis points from the prior year. Company leadership characterized the quarter as delivering the highest earnings per share performance in Celestica’s history.
Both primary business divisions contributed to the robust growth. Demand within the communications and enterprise sectors remained resilient, powered by 800G networking solutions and rapidly expanding AI computing operations.
The high-margin HPS business unit also experienced growth, enhancing Celestica’s ability to command premium pricing and improve operational leverage. The company generated $147 million in free cash flow during the three-month period.
Company Increases Annual Projections Significantly
Celestica raised its 2026 annual revenue projection to $20.5 billion, up from the prior forecast of $19 billion. Adjusted earnings per share guidance was increased to $11.30 from $10.15.
The electronics manufacturer also elevated its adjusted operating margin forecast to 8.4% from 8.1%, while free cash flow expectations rose to $600 million from $500 million.
Looking ahead to the third quarter, Celestica projected revenue in the range of $5.25 billion to $5.55 billion with adjusted EPS between $2.88 and $3.08. Communications segment revenue is anticipated to climb approximately 60% during the period.
The enterprise division is forecast to experience a dramatic 190% revenue increase in Q3, propelled by AI computing and storage infrastructure demand.
Leadership offered preliminary commentary on 2027, indicating that revenue expansion should outpace the 65% growth rate anticipated for 2026.
Strategic Collaborations with OpenAI and AMD Highlighted
Chief Executive Rob Mionis revealed that Celestica will partner with OpenAI alongside Broadcom to facilitate custom accelerator development initiatives. The first shipments of specialized rack systems are slated for delivery in the latter half of this year.
Management also emphasized AMD’s Helios computing platform and next-generation 1.6 terabit networking programs as significant catalysts for future expansion.
Chief Financial Officer Mandeep Chawla indicated that the primary limitation to growth stems from materials availability rather than customer demand. He confirmed that capacity expansion plans are already established for both 2026 and 2027.
Capital spending for 2026 is projected to approach $1 billion. The company has set aside $1.5 billion as a preliminary estimate for 2027 capital investments.
Across the previous four reporting periods, Celestica has consistently exceeded consensus earnings per share forecasts in every instance.
The equity holds a Zacks Rank #2 (Buy) designation. Trading at a P/E multiple of 37.46 with a PEG ratio of 0.3, the valuation metrics indicate the shares are attractively priced relative to anticipated near-term earnings expansion.
Year-to-date, Celestica shares have appreciated roughly 3.3%, underperforming the S&P 500’s 8.3% advance over the same timeframe.
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