Shares of Plexus Corp. (NASDAQ:PLXS) tripped over a cliff yesterday and haven’t been able to get back up. The crash comes on news that the company will no longer be providing electronic equipment manufacturing services to its largest customer, Juniper Networks (NYSE:JNPR). The stock price collapsed over 28 percent by afternoon trading.
Juniper Networks has not disclosed where it will take its business, but reports indicate that the company will be transitioning from three to two manufacturers. Plexus CEO Dean Foate said he was surprised his company didn’t make the cut. The massive sell-off has brought the share price down to to its lowest point since 2009. Juniper accounted for 17 percent of Plexus’ fiscal 2011 sales.
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“While this is a significant event for us in the near term, our new business wins of $956 million during fiscal 2012, including in the networking/communications sector, provides us continued optimism in our strategy,” said Foate in a statement.
The company’s stock saw some losses on October 24 when it released its fourth-quarter results. Revenue grew 10 percent year over year to $594.8 million, while earnings per share came in at $0.66, beating estimates by 3 cents. Revenue for the fiscal year was a record $2.3 billion. However, fourth-quarter results were still at the lower-end of the company’s guidance, and the company pointed to soft end-market demand going into the future.
Juniper may have chosen to take its business to cheaper manufacturers. RBC Capital Markets analyst Amit Daryanami told Reuters, “Last quarter Plexus talked about how they had to give some pricing concessions to a number of their networking customers, and I suspect it was a pricing issue that pulled away Juniper.”
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