Benchmark Electronics Inc. (NYSE:BHE) Q3 2020 Earnings Conference Call - Final Transcript
Oct 28, 2020 • 05:00 pm ET
[Operator Instructions] And our first question comes from Jaeson Schmidt of Lake Street. Please go ahead.
Hey guys. Thanks for taking my questions. I just want to start, Jeff, you mentioned customers are being a bit more cautious then, hence, why you won't see that seasonal uptick in Q4. I know there's a variety of different moving parts given the business segments. But can you just discuss, have you seen any significant change in your overall visibility? Or just comment how visibility has changed from three months ago.
Jeffrey W. Benck
Yeah. Thanks, Jaeson. Good to hear from you. I think I'll start with saying a little bit that we are seeing probably more stabilization and demand and not quite the level of fluctuation. Certainly, in Q2, it was pretty crazy. And then Q3, it -- there was still a lot of movement. But in the end, we landed where we thought we would. What -- as we look at Q4, you're absolutely right, there is quite a few moving parts, and we see continued strength in semi-cap and defense products and those segments. What probably was a little different than the way we thought about it a few months ago was that we've seen a little bit of softness in medical in fourth quarter with some of the COVID-specific products that we had some upside.
And certainly, we enjoyed some of that, and some of that will continue in part of Q4, but we see some of that coming to an end as folks build up inventories and do what they needed to do. I think we're getting decent visibility to it. So it's not like this is a complete surprise, but it certainly shifted a bit over the last couple of months. And that's just what caused us -- when you look at our guide being more in line with Q3 than what might be a higher seasonal Q4. And I would say that's the bigger -- the driver. We're still bullish on medical and we have not only a great win -- a set of wins that were ramping, but that will really be happening for us more in '21.
Okay. And then just going off that, sticking with the medical business. I mean are you starting to see the funnel build back up for COVID-related or COVID-adjacent projects for 2021?
Jeffrey W. Benck
I would say when you -- we have a very diverse medical business, and we've highlighted 12 products that we built that fight COVID. And we have some exciting new therapeutic, and we talked about DnaNudge's rapid COVID test that's non -- right on point, point of care. And they've got a great position in Europe and super excited about that. So there's examples like that. We did build a number of ventilators for multiple customers. And the course of treatment for COVID has shifted, right, and people are going to ventilators as the last resort. So that's an area where there was a ton of demand, and people were