Jabil Circuit (JBL) Message Board

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Technology Stocks : Jabil Circuit (JBL)

JBL 211.00

-3.8%

Nov 11 3:59 PM EST

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To: Sam who wrote (5589)	6/10/2000 5:24:00 AM
From: Neil H	Read Replies (1) of 6317

Staff Writer: Steve Smith (6/10/00) Jabil Circuit (NYSE: JBL - Quotes, News, Boards) is expected to earn $0.21 per share for its fiscal third quarter ended May 31, a 42% increase over the year ago period. Jabil provides contract electronic manufacturing services (EMS). The company designs and manufactures circuit board assemblies and systems for major original equipment manufacturers. Contract work has come in great demand as more companies look to focus on product development and outsource the manufacturing and supply chain processes. Witness Motorola's (NYSE: MOT - Quotes, News, Boards) recent $30 billion deal with Flextronics (NASDAQ: FLEX - Quotes, News, Boards). That's why it was somewhat surprising that Jabil came up a penny short of estimates last quarter in earning $0.18 per share. That may have been a result of too-high expectations, after all that was still a 38% improvement over the year ago period. Just how good is business? Jabil recently began construction for a $40 million expansion to its Michigan plant. Uh Oh! What if the economy slows and the company is saddled with overcapacity problems? At least they managed to raise $542 million by selling 13 million shares at $41.75 in a secondary offering last week. A sign of the company's strength is that the market absorbed the new shares, and the stock is trading higher at $45, up 88% over the past eight months. We like the company but suggest investors proceed with caution. The business is highly dependent on a strong demand. With rumblings of an economic slowdown, any disappointment or words of warning will be met with heavy selling.

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