Celestica recently reported strong financial results for the fourth quarter and full year 2024, with Q4 sales increasing to USD 2,546 million and net income rising to USD 152 million. Despite these positive numbers, the company's share price declined by 15% over the last quarter. Factors such as the resignation of the Audit Committee Chair and ongoing market volatility, fueled by anticipation around U.S. tariff announcements, likely contributed to this decline. While broader market indices like the Dow Jones and S&P 500 saw fluctuations, particularly due to tariff-related uncertainties, Celestica's guidance revisions and stable financial performance could offer some stability amidst the overall decline.

Be aware that Celestica is showing 2 possible red flags in our investment analysis.

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Despite some short-term volatility, Celestica's shares have shown exceptional performance over the past five years, with a very large total return of 2231.55%. Approaching this five-year window, strategic initiatives have significantly influenced this growth. In particular, Celestica's substantial investments in AI platforms and 800G networking solutions have played a pivotal role by expanding its high-margin product offerings. An aggressive approach to share buybacks, such as the repurchase of over 2.9 million shares as of January 2025, further enhanced shareholder value through increased earnings per share and better capital management.

Moreover, Celestica has outpaced its industry over the past year, achieving a remarkable 75.1% earnings growth compared to a decline for the broader electronic sector. This strong performance relative to both the market and industry highlights the company's ability to navigate challenges effectively. While ongoing diversification efforts mitigate reliance on key customers, the introduction of new products like the DS4100 networking switch signifies the company's proactive approach to capturing emerging market demands.

Learn about Celestica's future growth trajectory here.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include TSX:CLS.

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