What happened

Shares of Celestica (NYSE:CLS) have plunged today, down by 16% as of 10:45 a.m. EST, after the company reported fourth-quarter earnings results. The electronics manufacturing specialist missed earnings estimates and forecast first-quarter earnings below expectations as well.

So what

Revenue in the fourth quarter rose 10% to $1.73 billion, which translated into adjusted earnings per share of $0.29. Analysts were expecting sales of $1.73 billion and adjusted earnings per share of $0.31. Free cash flow was negative $35.9 million, and Celestica incurred $6.4 million in restructuring charges during the quarter. The company also completed its acquisition of Impakt Holdings, which was financed with debt.

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"Celestica delivered on its Q4 consolidated non-IFRS operating margin target of 3.5%, driven by strong performance in our CCS segment and our aerospace and defense business," CEO Rob Mionis said in a statement. "We were particularly pleased that we achieved this key margin metric despite the impact of slower cyclical demand from our capital equipment customers, which had an adverse impact on ATS segment margin for the quarter. Although we remain positive about our positioning and the long-term growth prospects of the capital equipment business, we will focus our efficiency initiatives during the first quarter of 2019 on improving margins and better aligning this business to the current revenue environment."

Check out all our earnings call transcripts.

Now what

Celestica had started to review its CCS revenue portfolio last year, looking to end underperforming customer programs that don't align with the company's long-term strategic objectives. Celestica says that CCS segment revenue will decline by around $500 million over the next 12 to 18 months as a result of the review, which is now "substantially complete."

For the first quarter, Celestica is guiding revenue to a range of $1.45 billion to $1.55 billion, with adjusted earnings per share of $0.12 to $0.18. Analysts are currently modeling for the company to generate $1.55 billion in sales with an adjusted profit of $0.27 per share.