By Adriano Marchese
Shares of Celestica slipped after the company reported unchanged operating-margin expectations for 2026, a signal of possibly slower earnings growth, despite a higher revenue outlook.
The stock was 16% lower, at 394.00 Canadian dollars (US$290.59), in Toronto. It has risen nearly threefold over the past 12 months.
For 2026, the company expects revenue of US$17 billion, US$1 billion higher than previous estimates, and adjusted earnings of US$8.75 a share, up from a previous outlook of US$8.20 a share.
According to FactSet, analyst consensus was for US$16.71 billion and US$8.62 a share.
While the full-year earnings guidance came in above expectations, JP Morgan analysts said in a report that even with higher expected revenue in 2026, Celestica isn't showing much improvement in profitability, since its adjusted margin outlook didn't rise, remaining unchanged at 7.8% for the year.
"In our view, [this] is the key driver for EPS guide tracking softer than the expectations of most bullish buy-side investors," analysts said in a report, with FactSet's estimates for adjusted earnings reaching as high as US$9.85 a share.
TD Cowen analyst John Shao said he was expecting a strong year ahead, but with limited upside potential.
"We still believe it takes incrementally more catalyst to move the stock, and for now, the market is not satisfied and wants more so the marginal benefit of a standard 'beat and raise' is decreasing," Shao said.
For the first quarter, Celestica has projected revenue in a range of $3.85 billion to $4.15 billion, with a adjusted operating margins of 7.8% at the midpoint of revenue and earnings guidance.
Adjusted earnings per share are expected to be $1.95 to $2.15.
Write to Adriano Marchese at adriano.marchese@wsj.com
(END) Dow Jones Newswires
January 29, 2026 12:15 ET (17:15 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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