Contract electronic manufacturing solutions provider Jabil Circuit Inc. (JBL) reported Tuesday a swing to profit in the second quarter from last year, when results were weighed down by hefty restructuring and impairment charges. The company's earnings surpassed analysts' view, but revenues fell short of estimates. Looking ahead, the company provided its earnings forecast for the third quarter, indicated to come in line with current Street estimates.
The St. Petersburg, Florida-based company reported net income attributable to the company for the second quarter of $29.8 million or $0.14 per share, compared to a net loss of $866.1 million or $4.19 per share in the year-ago quarter.
Excluding stock options expenses, restructuring charges, goodwill impairment charges and other items, core income for the second quarter was $63.3 million or $0.29 per share, compared to $27.3 million or $0.13 per share for the same period of fiscal 2009.
On average, sixteen analysts polled by Thomson Reuters expected the company to earn $0.28 per share for the quarter. Analysts estimates typically exclude special items.
Net revenues for the quarter increased to $3.0 billion from $2.9 billion in the prior-year quarter. Fourteen analysts had a revenue consensus of $3.01 billion for the second quarter.
Timothy Main, president and chief executive officer at Jabil Circuit said, "Results for the quarter indicate significant year-over-year margin expansion on modest revenue growth. We are gaining confidence that these positive trends may be sustained for the balance of the year."
The company had projected net income of $0.09 to $0.21 per share, core income of $0.20 to $0.32 per share, and revenue between $2.9 billion and $3.1 billion for the second quarter.
In its sequential first quarter, Jabil Circuit reported a profit of $28.3 million or $0.13 per share, compared to a net loss of $275.9 million or $1.34 per share last year that was hurt by hefty goodwill impairment charges. Adjusted for items, core earnings for the first quarter were $68.3 million or $0.32 per share, compared to $62.8 million or $0.29 per share in the prior year quarter. Net revenue fell 9% to $3.09 billion from $3.38 billion in the same quarter last year.
Among peers, Flextronics International Ltd. (FLEX) in late January, reported a net profit of $93 million or $0.11 per share for the third quarter, compared to a net loss of $6.0 billion or $7.43 per share last year, when the year ago results were weighed down by a hefty goodwill impairment charge. The Singapore-based contract electronics manufacturer's adjusted net income for the third quarter was $138 million or $0.17 per share, compared to $127 million or $0.16 per share in the prior year quarter. Net sales for the third quarter fell 19.5% to $6.56 billion from $8.15 billion in the same quarter last year. Third quarter net sales rose 12% sequentially.
Electronics manufacturing services company Sanmina-SCI Corp. (SANM) in January reported a net income of $59 million or $0.74 per share in the first quarter, compared to a net loss of $26 million or $0.29 per share last year, mainly on a one-time benefit related to certain legal proceedings as well as an increase in revenue. Non-GAAP net income in the first quarter was $18.46 million or $0.23 per share, compared to a net loss of $768 thousand or $0.01 per share in the same period a year ago. The San Jose, California-based company's net sales for the first quarter improved 4% to $1.48 billion from $1.42 billion in the comparable period a year-ago.
Jabil Circuit's operating income for the second quarter totaled $61.8 million, compared to a loss of $705.6 million in the same period of fiscal year 2009. Core operating income surged to $95.6 million or 3.2% of net revenue compared to $51.2 million or 1.8% of net revenue a year ago. For the six-month period, net income attributable to the company was $58.12 million or $0.27 per share, compared to a net loss of $1.14 billion or $5.53 per share in the same period last year. Core net income for the period improved to $202.08 million or $0.61 per share from $153.40 million or $0.42 per share last year.
Net revenue for the first half of fiscal 2010 declined to $6.09 billion from $6.27 billion in the similar period of 2009.
Looking forward to the third quarter, Jabil expects core earnings to improve 3% to 24%, ranging from $0.30 to $0.36 per share. GAAP earnings are expected to be in a range from $0.14 to $0.25 per share. Net revenue is estimated to increase 3% to 10%, ranging from $3.1 billion to $3.3 billion.
Street analysts currently expect earnings of $0.32 per share on revenues of $3.12 billion for the third quarter.
GAAP earnings for the third quarter of fiscal year 2010 is currently estimated to include $0.03 per share for amortization of intangibles; $0.07 to $0.12 per share for stock-based compensation and related charges; and $0.01 per share for restructuring.
Jabil shares, which have traded in a range of $3.73 to $18.49 over the past year, closed Tuesday's regular trading session at $18.36, up 59 cents or 3.32%. The stock is currently loosing 96 cents or 5.23% in after hours trade.
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