NEENAH, Wis. (AP) — Shares of supply chain provider Plexus Corp. plunged Wednesday after it said it had been dropped as a supplier to Juniper Networks Inc., a data network equipment maker.
The stock lost $7.45, or 26.7 percent, to close at $20.51 after falling as low as $19.65 earlier in the day, its lowest level since July 2009.
Plexus CEO Dean Foate said the Neenah, Wis.-based company was informed of the decision on Monday. He called it a "surprise." He told analysts on a conference call that Juniper told the company that it was moving from three to two manufacturing partners as it sought to cut operating costs.
He said business from Juniper, its largest customer, accounted for about $370 million in revenue for Plexus in fiscal 2012, about 16 percent of the company's revenue. Due to a transition period, Foate said he expected revenue from Juniper to fall to about $220 million to $270 million in fiscal 2013.
He expected no impact to Plexus' guidance for its fiscal first quarter through the end of December. Plexus said the timing of the separation as a supplier to Juniper wasn't clear but is expected to happen by the end of its fiscal year.
"Plexus has been an important strategic supplier to Juniper for more than a decade. While this is a significant event for us in the near term, our new business wins of $956 million during fiscal 2012, including in the networking/communications sector, provides us continued optimism in our strategy," Foate said in a statement.