Hi Glenn--
Looks like IronBridge is worming up:
OTTAWA (Reuters) - Celestica Inc. (NYSE:CLS - news) (Toronto:CLS.TO - news),
continuing its expansion into the burgeoning fiber-optic market, said on Tuesday it
would manufacture optical high-speed network routers for privately held IronBridge
Networks Inc.
The worth of the deal for Celestica is expected to be relatively modest, an analyst said.
The company is already the world's third-largest manufacturer of electronic components
on a contract basis.
But the agreement marks more business for the company in the fiber-optic market.
``It is clearly an area that they're interested in and they're looking at getting more
involved in,'' said Keith Dunne, analyst at Roberston Stephens Inc. ``This is more of a
sign that Celestica wants to continue to play in the leading end of communications
businesses.''
Celestica, which won a high-profile supply contract with fiber-optic components leader JDS Uniphase Corp.
(NasdaqNM:JDSU - news) (Toronto:JDS.TO - news) in July, said its new plant in Portsmouth, New Hampshire,
will be used for
optical network production for telecommunications and computer customers.
In the deal with IronBridge, Celestica will run a range of services from test engineering to assembly and support.
IronBridge
develops routers that Internet service providers use to send traffic at very high speeds.
``This market represents a strong growth area for us,'' said Celestica chief executive Eugene Polistuk in a
statement.
Shares in Celestica shed C$1.00 to C$118.50 on the Toronto Stock Exchange after the announcement and on
New York the
issue slipped $1-1/8 at $80-1/4.
The drop comes despite a higher stock target announced by UBS Warburg analyst Scott Heritage, who raised his
12-month
estimate for Celestica stock on the New York exchange to $100 from $84 on Tuesday. The analyst cited positive
``trends'' in
the company's communications unit and its optical components and modules division for the upgrade.
Heritage, who reiterated a strong buy rating, said the company is expected to discuss manufacturing and
operating margins at
its annual analyst meeting on Wednesday.
Celestica is UBS Warburg's top stock pick in the electronic manufacturing services sector, he said.
($1-$1.47 Canadian) |
