From TheStreet.com, a little digest of ECM earnings news and analyst ratings:
After Tuesday's Close
Electronics manufacturer Jabil Circuits (JBL:NYSE - news) posted second-quarter
earnings of 21 cents a share, beating Wall Street estimates by a penny. However, the
news was a mixed bag because the company also announced an undisclosed number of
job cuts and lowered its outlook for the next two quarters.
Jabil went on to say that it will take charges of $20 million to $25 million for the third
and fourth quarter in an attempt to realign manufacturing with lower-than-expected
volumes. Jabil Circuits closed up $1.64, or 9.1%, to $19.76.
Quantum DLT & Storage (DSS:NYSE - news) announced that it will post
lower-than-expected earnings for its fiscal fourth quarter, citing the continued
slowdown in information technology spending as the cause. The California-based
company said revenue is expected to decline 20% from the previous quarter, but
reassured that "despite the current economic climate, the fundamental strength of our
business model remains unchanged," according to CEO Michael Brown.
Shares of Quantum closed up 15 cents, or 1.3%, to $12.06.
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Analyst actions
Oops. They did it again.
One day after Credit Suisse First Boston analysts Herve Francois and Mark
Hassenberg snipped their earnings targets on Solectron (SLR:NYSE - news), the duo
did it again. Only this time, the pair upped their 2001 and 2002 forecasts, while
nudging up its price target to $30 from $23. CSFB now calls for the world's largest
electronics manufacturing service provider to make 83 cents a share for fiscal 2001, up
from the 78 cents called for yesterday.
Solectron closed down 17 cents, or 0.9%, to $18.92.
Why the change? The pair talked to management, which was probably unhappy about
yesterday's revised forecast from CSFB that was well below the rest of Wall Street.
Prudential Securities, ING Baring, Robertson Stephens and Bear Stearns all called for
the company to make more than 90 cents a share -- far more bullish than CSFB's call.
"After further discussion with management, we are adjusting our (ratings), based
solely on expected cost savings from Solectron's restructuring program," the pair wrote
to investors.
Merrill Lynch, which put Solectron's 2001 forecast in a headlock and noogied it down
to 86 cents a share, bullied the rest of the electronics manufacturing service sector.
Analyst Jerry Labowitz dropped his 2001 and 2001 earnings-per-share forecasts on
seven companies in the sector after visiting EMS companies in exotic locales and hearing
the bad news from Solectron.
"As we highlighted, February was the turning point for the EMS providers as a sharp
drop in demand from many original electronics manufacturing customers ... quickly
reduced the growth potential in calendar 2001, a trend we now believe could result in a
couple of quarters of flat sequential revenue growth," he wrote to investors in a note on
Wednesday morning. "Our visit to several EMS providers in Guadalajara and
Monterrey last week reinforced our thoughts."
Here's a recap of the adjustments made, and how they stack up to current Wall Street
consensus, as listed by First Call/Thomson Financial:
EMS: Earnings Made Simple
Company
New 2001 EPS
Old 2001 EPS
Consensus
Celestica (CLS:NYSE - news)
$1.72
$1.92
$1.97
C-Mac Industries (EMS:NYSE - news)
$1.42
$1.62
$1.68
Flextronics (FLEX:Nasdaq - news)
$0.89
$0.91
$0.91
Jabil Circuit (JBL:NYSE - news)
$0.76
$0.91
$0.97
Plexus (PLXS:Nasdaq - news)
$1.26
$1.38
$1.43
Sanmina (SANM:Nasdaq - news)
$1.19
$1.34
$1.38
SCI Systems (SCI:NYSE - news)
$1.29
$1.36
$1.41
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