| | | Contract electronics manufacturer Jabil Circuit ( JBL) this afternoon reported fiscal Q1 revenue that topped analysts’ expectations, but delivered profit slightly below consensus, and said it will divest for $725 million a division that provides “after-market services.”
Revenue in the three months ended in November was flat with the prior-year period at $4.6 billion, yielding EPS, on an adjusted basis (“core earnings”) of 51 cents.
Analysts had been modeling $4.47 billion and 54 cents.
In a separate statement, Jabil said it will sell its aftermarket services business for $725 million to holding company iQor Holdings, which sells services for customer care, back-office IT processing, call center “analytics,” and accounts receivable management.
CEO Mark Mondello said the business had been a “wonderful asset” to Jabil for years, producing $1.1 billion in revenue last year, but that “Today, Jabil’s AMS business is concentrated in depot repair for consumer electronics, which is not aligned with our strategy to focus on diversified manufacturing solutions.” $675 million is in cash, the rest in convertible notes on iQor’s shares.
The sale will “provide us the financial flexibility to potentially add more engineering intensive capabilities, which should allow us to expand and diversify our core manufacturing business,” said Mondello.
“We expect to continue to pursue opportunities similar to our recent Nypro acquisition,” added Mondello.”
The transaction is expected to close in fiscal Q3, the company said.
For the current quarter, revenue is seen in a range of $3.5 billion to $3.7 billion, with EPS in a range of 5 cents to 15 cents. That is below consensus for $4.3 billion and 52 cents. |
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