Key Highlights

● Fiscal fourth-quarter Revenue was $1.427 billion with non-GAAP Earnings of $2.84 per share.

● First-quarter earnings were guided to $2.46 to $2.62 per share.

● Revenue guidance of $1.41 billion to $1.46 billion brackets the latest quarter.

● Plexus expects at least $100 million of free Cash Flow in fiscal 2027.

Plexus (NASDAQ:PLXS) wrapped up its fiscal year with $1.427 billion in quarterly revenue, but an outlook for lower earnings in the first quarter of fiscal 2027 pulled the electronics manufacturer lower.

A step down on the guidance

Plexus closed out its fiscal year on Thursday, October 29, and investors did not like the first page of the next chapter. The stock slid to $217.87, according to market data, one of the notable decliners in the S&P SmallCap 600.

The contract electronics manufacturer reported fiscal fourth-quarter revenue of $1.427 billion and non-GAAP earnings of $2.84 per share. On its own, that was a solid quarter.

The problem was the forecast. For its fiscal first quarter, Plexus guided non-GAAP earnings to a range of $2.46 to $2.62 per share, according to market data. Even the top of that range sits well below the $2.84 it just delivered. Revenue guidance of $1.41 billion to $1.46 billion brackets the latest quarter, suggesting sales may hold roughly steady while profit dips.

Cash flow offers a cushion

Not every part of the outlook disappointed. Plexus said it expects to generate at least $100 million of free cash flow in fiscal 2027, according to market data. For a manufacturer that must invest in equipment and inventory to serve customers in health care, industrial and aerospace markets, a commitment to positive cash generation is meaningful.

Still, markets tend to trade on the next quarter's earnings direction, and that pointed lower. For a stock that had been priced on steady execution, a guided step back in profit was enough to trigger selling, even with the cash-flow target in hand.

Contract manufacturers like Plexus build complex products for other companies, so their outlooks depend heavily on when customers launch, ramp or pause programs. Shifts in that timing can move a quarter's earnings meaningfully.

Part of a pattern

Plexus was not the only company punished on Thursday for a softer forward view. Intel (NASDAQ:INTC) fell sharply in after-hours trading after its fourth-quarter guidance came in well below consensus, despite revenue that grew strongly. FormFactor (NASDAQ:FORM), another S&P SmallCap 600 technology name, also slid after guiding fourth-quarter earnings below its third-quarter level.

The theme was clear: beating for the quarter was not enough if the next one looked weaker.

A tech-heavy drag on the major indexes

The broader market was split. The Nasdaq Composite tumbled 365.13 points to 26,184.72 as Alphabet (NASDAQ:GOOGL) suffered its worst day since its 2004 IPO, erasing about $500 billion of market value. The S&P 500 slipped 23.59 points to 7,720.39. Small caps outperformed, with the Russell 2000 climbing to 2,859.22.

Breadth was healthier than the large-cap indexes suggested. NYSE advancers led decliners by 1.95 to 1, and more than 400 S&P 500 members rose, according to market data. Information technology was among only three S&P 500 sectors to fall.

The macro data offered a mixed message for manufacturers. Third-quarter GDP growth accelerated and beat forecasts, with Business Investment surging, but September PCE Inflation ran hot. The Federal Reserve held rates steady on Wednesday, with two officials dissenting in favour of a hike.

What to watch

Investors will look for detail on what is pressuring Plexus's near-term earnings, whether that is customer program timing, product mix or costs, and whether management expects margins to recover later in fiscal 2027.

Progress toward the $100 million free cash flow target will also be tracked. On the macro side, Friday's Employment Cost index and the Fed's December 8–9 meeting could influence how investors value manufacturers with cyclical end markets. The November 3 midterms add another variable for companies exposed to defense and industrial spending.