Jabil Circuit's Revenue Up by Nearly a Third
By Bill Snyder / Street.Com / 09/18/2003
In another sign that the hard-hit electronic manufacturing services sector is recovering, Jabil Circuit on Thursday reported that fourth-quarter revenue increased by nearly one-third year over year, to $1.3 billion.
Earnings, a scant $1.8 million, or a penny a share, a year ago, rose to $20.1 million, or 10 cents a share, according to generally accepted accounting principles. On a pro forma basis, the company earned 21 cents a share, compared to Wall Street's expectations of 20 cents a share and the company's forecast of earnings between 19 cents and 21 cents a share. Pro forma earnings a year ago were 15 cents a share.
Revenue was somewhat better than expected; in June the company told investors to expect sales ranging from $1.25 billion to $1.3 billon, while analysts polled by Thomson First Call expected $1.28 billion.
For the year, revenue was up 33.4% to $4.7 billion, while GAAP earnings were $43 million, or 21 cents a share, compared to $34.7 million, or 17 cents a share, in fiscal 2002.
Looking forward, the company expects revenue in the first fiscal quarter of 2004 to range from $1.375 billion to $1.425 billion, a sequential increase of 6% to 10%. Analysts were forecasting revenue of $1.37 billion. Core sales for the quarter, the company said, will range from 22 cents to 24 cents a share, roughly in line with expectations.
For the full fiscal year 2004, the company expects revenue growth of 20%, or $5.6 billion to $5.8 billion, with pro forma earnings ranging from 90 cents to 96 cents a share. GAAP earnings are expected to range from 73 cents to 79 cents a share.
Earlier in the week, Wells Fargo initiated coverage of Jabil with a buy rating and a target price of $32. "Since the beginning of the downturn, Jabil has been consistently profitable, with the smallest asset writeoffs and the greatest increase in retained earnings of any of its peer group," said analyst Jim Savage in a research note.
"Since its trough quarter (February 2002), the company's revenues have grown 48%, and its quarterly core EPS have surged 138%. In the May 2003 quarter, the company posted record revenues and its highest cash EPS in nine quarters. We expect Jabil to report two more quarters of sequential growth, culminating in a record quarter for both revenues and EPS, before experiencing a seasonal decline in the second (February) quarter of FY04.
The more bearish Chris Whitmore, of Deutsche Bank, said he expects both Jabil and Solectron (SLR) , which reports later in the month, to perform in line or above Wall Street estimates. But Whitmore continues to believe that EMS stocks are overvalued. "We do not believe the EMS industry, which is experiencing a stabilizing/modestly improving end-market environment and severe excess capacity, warrants a 3X market multiple. At 60 times CY04 EPS estimates and greater than four times CY04 EV/EBITDA, EMS shares remain overvalued," he said in a note to clients Thursday morning. (Deutsche Bank is seeking investment banking business with Solectron and does not have a banking relationship with Jabil.)
Alexander Blanton, of Ingall & Snyder, disagreed, saying that JBL isn't cheap, but considering that the company is forecasting core earnings growth of better than 25% for fiscal 2004," it's not tremendously overvalued."
Blanton, whose company does not have a banking relationship with Jabil, said he sees more early signs of recovery in the fact that as much as 80% of the growth in sales and earnings will come from new outsourcing business.
He also noted that Jabil is the first EMS company to give full-year guidance in some time. Indeed, CEO Timothy Main said in a conference call that he is gaining more confidence in guidance from his customers, another indication that visibility is improving as the economy strengthens.
The strong report was expected by the Street, so it wasn't surprising that the stock was off a bit, losing 41 cents, or 1.4%, to $29.04 in after-hours trading.
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Briefing.Com (Sept 18, 2003)
15:26 ET Jabil Circuit tgt raised to $35 at Raymond James (JBL) 29.45 +0.25: Raymond James raises its price tgt to $35 from $29. Firm believes the higher multiple is warranted given the recent improvement of visibility into the channel along with increasing optimism across most segments of the electronic manufacturing supply chain regarding a pickup in end-market demand. (Note that co is scheduled to report earnings tonight).
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Jabil Circuit Reports 4Q & Fiscal Yr Results; Co Posts Record Rev For Qtr And Year
DOW JONES NEWSWIRES Sept 18, 2003
ST. PETERSBURG, Fla. -- Jabil Circuit’s fiscal fourth-quarter income jumped more than tenfold on 31% revenue growth and lower charges than a year earlier.
In a press release Thursday, Jabil said fourth-quarter income rose to $20.1 million, or 10 cents a share, from $1.8 million, or 1 cent a share, a year earlier. Both years' results included charges from restructuring, acquisitions and amortization of intangible assets. Core earnings, which exclude these items, rose to $41.4 million, or 20 cents a share, from $30.3 million, or 15 cents a share, a year earlier.
The core earnings for the latest quarter met a Thomson First Call consensus forecast of 26 analysts.
The electronics contracts maker's revenue for the quarter ended Aug. 31 rose to $1.3 billion, topping analysts' mean expectation of $1.28 billion. A year earlier Jabil posted revenue of $988.2 million.
Jabil Circuit expects fiscal 2004 core earnings of 90 cents to 96 cents a share, bracketing First Call's mean analyst expectation of 93 cents. Jabil projects full-year earnings under generally accepted accounting principles of 73 cents to 79 cents a share.
Jabil sees fiscal 2004 revenue of $5.6 billion to $5.8 billion, which would top analysts' current consensus forecast of $5.53 billion.
For the fiscal first quarter, Jabil projects core earnings of 22 cents to 24 cents a share, in line with analysts' forecast of 23 cents. On a GAAP basis, Jabil sees first-quarter earnings of 17 cents to 19 cents a share.
Jabil also projects revenue of $1.375 billion to $1.43 billion for the first quarter ending in November. Wall Street currently expects revenue of $1.375 billion, according to Thomson First Call.
In the year-earlier first quarter, Jabil posted GAAP earnings of 4 cents a share, core earnings of 15 cents a share, and revenue of $1.07 billion. |
