Merix jumps on 4Q forecast

2 min read

Merix Corp. (Nasdaq:MERX) shot up 22 percent Thursday after it said earnings for its fourth quarter should be between 45 and 47 cents a share, well above First Call's expectation of 27 cents a share.

Shares in the company, which makes complex multilayer rigid printed circuit boards, were up 7 1/8 to 39.

Earnings also show strong growth over the 11 cents per diluted share reported in the fourth quarter last year and 24 cents per share declared last quarter. Preliminary fourth quarter sales were $46.2 million compared to sales of $32.9 million in the same quarter last year and $39.7 million last quarter.

The company said the strong quarter was driven by increased capacity utilization and a more favorable product mix, which bumped up average pricing.

The preliminary results also showed sales increased 16 percent compared to last quarter as a result of higher levels of production and pricing. The company also boosted manufacturing metrics, reporting on-time delivery of 98 percent, improved yields, and record levels of output.

The order rate for high technology printed circuit boards continues to be strong as capacity in the industry is tightening, Merix said. The company's book-to-bill ratio for the quarter was 1.33 to 1.0, and demand in the communications segment was particularly strong; communications accounted for about 56 percent of fourth quarter sales.

The company said it expects quarter to quarter earnings to continue to grow, although at a more modest rate, and expect the growth to offset the dilutive impact of the 2.3 million new shares of stock issued in its recently completed offering.

Merix competes with Flextronics (Nasdaq: FLEX), Hadco (NYSE: HDC) and Viasystems (NYSE: VG) according to Hoover's Online.