Will Declining ATS Revenues Hinder Celestica's Q4 Earnings?

Celestica, Inc. CLS is scheduled to report fourth-quarter 2025 earnings on Jan. 28. In the to-be-reported quarter, the company is likely to have recorded lower revenues from the Advanced Technology Solutions segment owing to soft demand in some end markets and macroeconomic headwinds.Factors at PlayThe Advanced Technology Solutions (ATS) segment primarily focuses on aerospace and defense (A&D), Industrial, HealthTech and Capital Equipment businesses, which include semiconductor and display verticals.The company is experiencing weakness in the ATS segment. Elevated inventory levels in the Industrial end markets are primarily hindering net sales growth in this segment. Although demand has stabilized, macroeconomic challenges remain headwinds. Demand in the semiconductor capital equipment market remains soft. Foundries also constrained spending on capacity buildup due to a clouded outlook in the future demand stemming from tariff and trade-related uncertainty.Celestica has been actively reshaping its portfolio for aerospace and defense markets. This is impacting revenues in the near term but is expected to drive profitability in the long run. Weaknesses in the capital equipment, aerospace and defense market are expected to be partially offset by healthy traction in the healthtech portfolio.Overall ExpectationsThe Zacks Consensus Estimate for ATS revenues is pegged at $789.68 million, indicating a decline from $805.8 million a year ago. Net income is projected at $42.41 million.The Zacks Consensus Estimate for total revenue is pegged at $3.45 billion, indicating 35.46% year over year growth. The consensus mark for earnings is currently pegged at $1.73 per share, indicating growth from $1.11 in the year-earlier quarter.Earnings WhispersOur proven model does not conclusively predict an earnings beat for Celestica for the fourth quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That is not the case here.You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Celestica currently has an ESP of 0.00% with a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.Stocks to ConsiderHere are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:Corning Incorporated GLW is set to release quarterly numbers on Jan. 28. It has an Earnings ESP of +1.72% and carries a Zacks Rank #2. The Earnings ESP for Amphenol Corporation APH is +3.78%, and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Jan. 28.The Earnings ESP for SAP SAP is +0.57%, and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Jan. 29.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amphenol Corporation (APH): Free Stock Analysis Report SAP SE (SAP): Free Stock Analysis Report Corning Incorporated (GLW): Free Stock Analysis Report Celestica, Inc. (CLS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks