Celestica Stock Is up 62% in 2024 Alone, and an Earnings Pop Could Bring Even More

Celestica (TSX:CLS) haș been one of the best-performing stocks in the last year. In 2024 alone, the company has surged in share price, up by 62%. However, in the last year, shares have climbed an incredible 280% on the TSX today.

With earnings due out Apr. 24, let’s take a look at what’s been going on with Celestica stock.

About Celestica

Before we get into earnings, with first-quarter results coming out after market close on Apr. 24, let’s first get into what makes Celestica so great in the first place. Celestica was founded in 1994 as a spin-off from IBM Canada’s manufacturing operations. Initially, it operated as a subsidiary of IBM, but it became an independent company in 1996. Since then, Celestica has grown to become one of the largest EMS companies globally. 

Celestica stock now provides a range of design, manufacturing, and supply chain solutions for original equipment manufacturers (OEMs) in various industries, including aerospace and defence, healthcare, industrial, semiconductor, and telecommunications. Its services include product design and engineering, manufacturing, assembly, testing, and supply chain management.

These include areas where Celestica stock is involved in the production of semiconductor use. If you’re not aware, there has been a huge demand for semiconductors with the rise of artificial intelligence, and a supply shortage. Celestica stock provides the equipment used in semiconductor production as a leading supplier of machines for wafer fabrication, a crucial step in semiconductor manufacturing. The company is involved in assembling finished devices that use semiconductors but don’t make the semiconductors themselves.

Earnings growth

It’s not all just some excitement around Celestica stock, although that’s part of it. The company has seen positive momentum throughout the year, with even more expected during 2024. So, let’s take a look at where investors should identify more growth.

During the second quarter, Celestica stock reported a strong quarter that exceeded the high end of its guidance. Revenue hit $1.94 billion, with adjusted earnings per share (EPS) of $0.55. It expected revenue of between $1.9 and $2.05 billion in the third quarter with upwards of $0.62 adjusted EPS. It also raised its 2023 guidance to revenue of at least $7.85 billion and adjusted EPS of $2.25.

The third quarter hit that result at $2.04 billion, with adjusted EPS even higher at $0.65. It then stated it should see up to $2.15 billion in revenue or higher than $2 billion, and adjusted EPS up to $0.71. Again, it updated its outlook for 2023 to $7.9 billion.

The fourth quarter came in strong. Revenue punched in at $2.14 billion, with adjusted EPS at $0.76! Furthermore, 2023 surpassed even the raised outlook, rising to $7.961 billion, with adjusted EPS at $2.43.

What to expect

Again, the company came out with what it expects for the first quarter. Celestica stock is aiming for between $2.025 and $2.175 billion in revenue, with adjusted EPS between $0.67 and $0.77. Given the company’s recent history, it looks like it will easily achieve the results. Yet if it doesn’t pass those results, investors could be in for a negative surprise.