• CEO Robert Mionis told analysts that the company is experiencing more component shortages now than 90 days ago, due to growing AI demand, leaving suppliers behind in adding capacity. 
• In Q1, the company reported a more than 50% surge in revenue to $4.05 billion, in line with the consensus, and adjusted earnings per share of $2.16, beating by $0.08.
• For the full year, it guided adjusted EPS to $2.14 to $2.34 per share, ahead of the $2.13 estimate, and revenue of $4.15 billion to $4.45 billion, above the $4.17 billion estimate when compared to the midpoint of the range.

Celestica (CLS) shares are on track for their biggest one-day percentage decline in over a year after the electronics manufacturing company’s executives flagged long-term pressure on gross margins due to high input costs, and spoke about component shortages, among other things, as AI demand continues to outpace supply.

The company’s commentary during its first-quarter (Q1) earnings call with analysts overshadowed its strong report and forecast, which sent its shares down more than 16%.

Earnings Call Commentary

While speaking to UBS analyst David Vogt, who inquired about gross margin progression of the business, particularly with TPU production ramping, Celestica CFO Mandeep Chawla said, “longer term, there are some headwinds on the gross margin side . . .  there's some input costs that are going up materially, whether it be memory or whether it be silicon and so those are some headwinds that we're working through.”

CEO Robert Mionis also told analysts that the company is currently experiencing more component shortages now than 90 days ago, due to growing AI demand, leaving suppliers behind in adding capacity. 

“The good news is that all of our key suppliers are currently in the works of adding capacity, and we expect the situation to improve,” Mionis told analysts on the call.

Over 50% Surge In Revenue

Celestica reported a more than 50% surge in revenue to $4.05 billion in Q1, in line with the consensus, and adjusted earnings per share of $2.16, beating by $0.08, according to Fiscal AI estimates.

For the full year, it guided adjusted EPS to $2.14 to $2.34 per share, ahead of the $2.13 estimate, and revenue of $4.15 billion to $4.45 billion, above the $4.17 billion estimate when compared to the midpoint of the range.

How Did Retail Traders React?

On Stocktwits, retail sentiment about CLS turned ‘extremely bullish’ from ‘bullish.’

One user on the platform calls the current pullback in CLS shares a “nice buying opportunity.”

Another user views the current stock price slump as “a good point to restart position.”

CLS has outperformed the S&P 500 so far this year and over the last 12 months.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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