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Jabil Results Top Estimates

Jabil Results Top Estimates
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12/19/2012 6:16 PM ET

Contract electronics manufacturer Jabil Circuit Inc. (JBL: Quote) said Wednesday after the markets closed that its first quarter profit fell 6% from last year, as higher costs and expenses more than offset a 7% increase in revenue.

However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations as did its quarterly revenue. At the same time, the company forecast second quarter earnings below analysts' current consensus estimate. "Diversified Manufacturing Services increased to 47 percent of our overall business, paced by outstanding growth in Specialized Services," said Timothy Main, President and CEO of Jabil. Jabil shares are currently gaining 5.55% in after hours trading after closing the day's regular trading session at $18.57, up 16 cents. The shares are trading in a 52-week range of $16.82 to $27.40.

The St. Petersburg, Florida-based company reported net income for the first quarter of $105.8 million or $0.51 per share, compared to $112.9 million or $0.54 per share for the year-ago quarter.

Excluding items, core earnings for the first quarter were $127.8 million or $0.61 per share, compared to $136.2 million or $0.65 per share in the prior year quarter.

On average, 12 analysts polled by Thomson Reuters expected the company to earn $0.56 per share for the first quarter. Analysts' estimates typically exclude special items.

Operating margin for the quarter narrowed to 3.7% from 3.9% a year earlier, while adjusted operating margin shrank to 4.2% from 4.5% last year.

Net revenue for the first quarter rose 7% to $4.64 billion from $4.33 billion in the same quarter last year. Ten analysts had a consensus revenue estimate of $4.41 billion for the first quarter.

For the first quarter, Jabil's Diversified Manufacturing Services business surged 20% year-over-year, while its Enterprise & Infrastructure business increased 17%, while its High Velocity business dropped 20%.

Looking forward to the second quarter, the company forecast net revenue of $4.3 billion to $4.5 billion, earnings of $0.40 to $0.48 per share and adjusted earnings of $0.50 to $0.58 per share.

Analysts currently expect the company to earn $0.59 per share on revenue of $4.38 billion for the second quarter.

"Expectations for the second fiscal quarter of 2013 are consistent with seasonal patterns of demand," said Jabil CEO Timothy Main. "End market demand remains muted in business sectors exposed to government and business spending. Although environmental conditions continue to be uncertain, we maintain our expectation that fiscal 2013 will be another record year for Jabil."

Jabil said in October that Chief Operating Officer Mark Mondello will be promoted to succeed Timothy Main as CEO, effective March 1, 2013. The company also said that Chairman and Co-Founder William Morean has decided not to stand for re-election to the board at the January 2013 annual meeting of shareholders and plans to retire. The company expects Main to be appointed Chairman immediately following Morean's departure.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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