March 26, 2013 08:00 ET

Smartphones and Tablets Continue to Drive Growth for Printed Circuit Board Makers

The Provides Stock Research on Plexus Corp. and TTM Technologies Inc.

NEW YORK, NY--(Marketwire - Mar 26, 2013) - The worldwide printed circuit boards industry benefited from growth in smartphone and tablet usage. The trend is expected to continue in 2013, which augurs well for companies such as Plexus Corp. (NASDAQ: PLXS) and TTM Technologies Inc. (NASDAQ: TTMI). The printed circuit board (PCB) industry faced significant challenges in 2010 and 2011 due to the global economic slowdown. The slowdown resulted in reduced demand for consumer electronic products, telecommunications and IT products and smart cards. While the macro environment remained challenging in 2012, the PCB industry benefited from increasing demand for smartphones and tablets. Going forward, smartphones and tablets will be key growth drivers for the PCB industry. In addition, the economic outlook in the U.S. has improved significantly. The Chinese economy is also showing signs of improvement. This trend bodes well for the PCB industry.

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According to data released by industry association IPC earlier this month, total North American PCB shipments were down 1.1% in January 2013 from January 2012. Bookings fell 4% on a year-over-year basis in January 2013. However, the book-to-bill ratio for North American PCB industry crossed into positive territory in January. The book-to-bill ratio for January 2013 stood at 1.01. Sharon Starr, Director of Market Research at IPC, noted that the book-to-bill ratio for the North American PCB industry strengthened for the second consecutive month, turning the corner in December following an eight-month downturn.

Back in January this year, Plexus Corp. reported its financial results for the first quarter ended December 29, 2012. The Neenah, Wisconsin-based company reported revenue of $531 million for the quarter, in-line with the guidance provided by the company. Diluted earnings per share for the quarter were $0.47. For second quarter of fiscal 2013, Plexus Corp. expects to report revenue of $550 million to $580 million. Diluted earnings per share for the quarter are expected to be between $0.50 per share and $0.55 per share.

Dean Foate, President and CEO of Plexus Corp., said at the time of the release of first quarter results in January that despite the challenges in the end-market demand environment, the company's new business development results were strong again in the first quarter.

Last month, TTM Technologies Inc. reported its financial results for the fourth quarter ended December 31, 2012. The company's net sales for the quarter totaled $382.4 million. GAAP net income for the quarter was $15.7 million, or $0.19 per share. On a non-GAAP basis, the company reported fourth quarter net income of $21.5 million, or $0.26 per share.

Kent Alder, CEO of TTM Technologies Inc., last month said that the company experienced broad-based demand for its advanced HDI PCBs across multiple end markets, particularly for smartphones and touchpad tablets. Alder noted that the product mix shift toward more advanced HDI PCBs drove higher gross margin and operating profit, resulting in stronger earnings for the quarter.

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