Celestica Inc. (NYSE:CLS; TSE:CLS) Shares Climb 8% on Guidance Pointing to $6.35 Billion Q4 Revenue (Google)
28 July 2026
2 mins read

Celestica Inc. (NYSE:CLS; TSE:CLS) Shares Climb 8% on Guidance Pointing to $6.35 Billion Q4 Revenue (Google)

TORONTO, July 28, 2026, 04:18 EDT — U.S. premarket trading; Canadian markets have ended for the day.

  • After-hours latest: $343.75, gaining 8.02%. Monday’s closing price: $318.24, higher by 4.25%.
  • Celestica Inc.’s 2026 revenue forecast was raised by 7.9% to $20.5 billion, while adjusted EPS guidance was lifted 11.3% to $11.30.
  • Initial calculations indicate fourth-quarter revenue reached $6.35 billion, with adjusted earnings per share at $3.62.

Celestica shares pointed to an 8% gain after the company raised its full-year outlook. After-hours pricing was last indicated at $343.75, compared to Monday’s close of $318.24.

The key takeaway for investors is contained within the full-year results. Celestica must generate $11.75 billion in revenue over the second half, which is a 34.4% increase over its sales in the first half.

Stock chart for NYSE:CLS

Adjusted earnings per share need to total $6.60 in the second half, marking a 40.4% increase over the figure reported in the first half.

Midway through the third quarter, initial calculations show $6.35 billion remaining for Q4, representing a 17.7% increase from Q3 and a 35.2% rise compared to Q2. The implied adjusted EPS stands at $3.62, marking a 21.5% sequential gain.

MeasureH1 actualH2 requiredQ3 midpointImplied Q4*
Revenue, $ billion8.7511.755.406.35
Adjusted EPS, $4.706.602.983.62
Sequential changeRevenue up 14.9%Revenue up 17.7%
Sequential changeEPS up 17.3%EPS up 21.5%

Initial projections. H2 is calculated by subtracting first-half actuals from the full-year outlook. Q4 reflects H2 figures minus the midpoint for Q3. Celestica did not provide guidance for the fourth quarter.

These residuals do not represent company targets. They indicate the exit rate that is already factored into management’s annual guidance.

Revenue for the second quarter increased by 62% to $4.70 billion, while adjusted EPS jumped 83% to $2.54. Both metrics surpassed analyst expectations by about 7% and 10%, respectively.

The Q3 outlook lifted expectations for the short term. The midpoint for EPS is $2.98, which is 10.8% higher than the most recent consensus. Revenue at the midpoint is projected to climb 14.9% compared with Q2.

The Connectivity and Cloud Solutions segment led results for the quarter. Revenue climbed 84% to $3.81 billion, accounting for 81% of overall sales. Enterprise revenue soared 167% as an AI-compute initiative scaled up.

Communications revenue increased by 62% due to stronger demand for data-centre networking. Hardware Platform Solutions saw sales grow 58%, reaching roughly $1.9 billion.

Operating leverage increased. CCS margin climbed to 8.7%, with ATS margin advancing to 6.3%. Adjusted operating margin for the entire company hit a record 8.2%.

Chief Executive Rob Mionis linked the increase to “strengthening second half customer forecasts” as well as “improved component supply.” Celestica anticipates its growth in 2027 will surpass the 65% rate projected for 2026. Adjusted EPS is expected to outpace revenue growth. Celestica Inc.

Cash flow increased, but expansion continues to demand substantial capital. Operating cash flow totaled $410.9 million, while capital expenditures amounted to $263.8 million. This resulted in free cash flow of $147.1 million.

Celestica increased its annual free cash flow outlook to $600 million, up from the earlier projection of $500 million. The company’s inventory climbed to $3.40 billion, compared with $2.19 billion at the end of the previous year. Despite this, the cash cycle shortened to 47 days from 66.

The stock experienced significant volatility in the previous week ahead of earnings. It peaked at $349.31 on Thursday before ending Friday at $305.28. On Monday, trading fluctuated between $289.26 and $323.55.

Shares are trading at $343.75, representing about 30.4 times the projected adjusted EPS. This valuation offers little cushion if fourth-quarter growth falls short.

Risks: In the second quarter, Celestica’s leading ten clients accounted for 83% of its revenue. Three customers within the CCS segment made up 32%, 17%, and 14%, respectively. Any impact from tariffs, shortages of components, or slower product launches may affect delivery schedules and financial performance.

The initial test of the week is set for 8:00 a.m. EDT. Management will conduct its results call ahead of the opening of North America’s main trading sessions. Investors are expected to question demand trends, availability of components, and whether capacity can support the forecasted Q4 increase.

Core trading in the United States starts after a 90-minute delay. Toronto’s continuous session also begins at 9:30 a.m. ET.

The beat was decisive. The more challenging issue is if Celestica is able to achieve the exit rate.

How robust were Celestica’s results for the second quarter?

Revenue climbed to $4.70 billion, up 62% compared to the second quarter a year ago. Adjusted EPS was $2.54, increasing from $1.39 in the same period last year. Revenue surpassed the high end of company guidance by $249 million, or 5.6%, while adjusted EPS topped its guidance ceiling by $0.20, or 8.5%. GAAP EPS stood at $3.17, which includes a pre-tax total-return-swap gain of $0.90 per share. The company’s adjusted operating margin reached a record 8.2%. Celestica Inc.

What caused CLS shares to surge, and what valuation does that represent?

CLS finished Monday trading at $318.24, up 4.25% ahead of the earnings announcement. Google Finance later reported an after-hours price of $343.75, up an additional 8.02%. That figure represents around 30.4 times the company’s revised 2026 adjusted EPS goal. Shares remained approximately 27% under the stock’s 52-week peak of $474.02. After-hours pricing is provisional. Google

By how much did management increase the 2026 forecast?

Management increased its 2026 revenue outlook to $20.5 billion, up from the previous $19.0 billion estimate, a rise of $1.5 billion or around 7.9%. Adjusted EPS guidance moved up to $11.30 compared to $10.15, representing an 11.3% gain. The company lifted its adjusted operating margin outlook by 30 basis points to 8.4%. Free-cash-flow guidance climbed by 20% to a target of $600 million. Celestica now projects 65% revenue growth and 87% adjusted EPS growth. Celestica Inc.

How should the exceptional growth projection for 2027 be interpreted?

Management anticipates revenue growth in 2027 will exceed the forecasted 65% for 2026. Applying a growth rate above 65% to the $20.5 billion baseline would result in revenue surpassing $33.8 billion, based on Celestica first reaching its full 2026 revenue target. The company projects adjusted EPS will outpace revenue growth in 2027. However, this does not constitute a formal dollar guidance range for 2027. Investors are awaiting greater clarity on program schedules and more specific customer commitments. Celestica Inc.

How challenging is the outlook for second-half earnings?

Revenue guidance for the third quarter is set between $5.25 billion and $5.55 billion, with adjusted EPS guidance ranging from $2.88 to $3.08 per diluted share. The midpoints suggest approximately 15% sequential growth in revenue and 17% growth in EPS. Taking into account the first-half performance alongside full-year objectives, fourth-quarter revenue is estimated to be about $6.20–$6.50 billion. Using the same calculation, fourth-quarter adjusted EPS is estimated at $3.52–$3.72. These fourth-quarter projections are derived calculations and do not constitute the company’s official guidance. Celestica Inc.

What segments are driving Celestica’s expansion?

CCS contributed $3.81 billion, accounting for 81% of the quarterly revenue. Revenue climbed 84%, whereas ATS posted an 8% increase. Communications revenue advanced 62% to $2.65 billion due to strong demand for data-center networking. Enterprise revenue soared 167% to $1.16 billion, supported by hyperscaler AI compute. Hardware Platform Solutions generated roughly $1.9 billion, up 58% from a year earlier.

Is there improvement in margins even though gross margin is lower?

Adjusted operating margin gained 80 basis points to a new high of 8.2%. GAAP operating margin was up 40 basis points, finishing the quarter at 9.8%. However, GAAP gross margin fell 50 basis points to 12.3%. Management attributed the decrease in gross margin to CCS business-mix dynamics. Adjusted gross margin also slipped marginally, coming in at 11.5% for the quarter. This indicates that scale benefits are materializing below the gross-profit line. Celestica Inc.

Is cash flow sufficient to sustain inventory levels and increased capacity?

Operating cash flow for the second quarter totaled $410.9 million. Capital expenditures stood at $263.8 million, resulting in $147.1 million in free cash flow. Inventory increased by 55% over the first half, amounting to $3.40 billion. Capital spending for the first half was $493.3 million, compared to $69.2 million a year earlier. An increase in accounts payable helped offset the rise in receivables and inventory. Celestica maintains its projection of around $1 billion in capital spending for 2026.

How significant is Celestica’s risk from customer concentration?

The ten largest customers were responsible for 83% of revenue in the second quarter, up from 78% in the same period the previous year. Three CCS customers contributed 32%, 17%, and 14% of revenue respectively, combining for 63% of the total for the quarter. Celestica does not disclose the identities of these customers in its quarterly report. As a result, a slowdown by any major customer could quickly impact reported revenue.

What key points should investors focus on during Tuesday’s earnings call?

The earnings call is scheduled for 8:00 a.m. ET on July 28. Investors are advised to look for evidence that supports revenue growth of over 65% for 2027. Clarification is also needed on the projected increase in both fourth-quarter revenue and earnings. Key factors continue to include component availability, customer forecasts, and capacity timing. Steven Dorwart took over as CCS president on July 6, succeeding Jason Phillips, who will stay on as an advisor through the end of 2026. Celestica Inc.

Jerzy Lewandowski is a senior markets editor at TS2.tech covering stocks, artificial intelligence, semiconductors and global financial markets. He studied economics at the University of Warsaw and previously worked in investment analysis before moving into financial journalism. His daily coverage focuses on the trends and events that matter most to investors worldwide. Follow Jerzy Lewandowski on Google News.

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