Flexf already said this quarter won't show big increases.
At the Montgomery conference breakout and in the conference call, they said that the MarQ quarter will have slower revenue growth due to the Chinese New Year effects in Asia, and because Neutronics biggest Q is the DecQ(by far, their revenues are strongly seasonal). China could see a 10% drop in revenues sequentially, and Neutronics could see a 20% drop. These drops will be offset some by good revenue growth in Mexico and San Jose, and perhaps the inclusion of revenues from the new SJ acquisition (accompanied by some dilution due to new shares issued to pay for it), and the Brazilian acquisition.
Also they are still seeing some start-up expenditures and costs related to all the acquisitions and build-outs, although probably somewhat less than last Q. So I expect flat revenues and only slight earnings growth this quarter. I believe the analysts are forecasting 51 cents versus 48 cents in the DecQ.
As the year goes on, and the new facilities get start-up and training costs behind them, and revenues continue ramping, and the pace of new acquisitions slows, I expect to see margin growth. I think this is the big upside in the stock; that the earnings estimates will need to be revised upward as the year progresses. Several analysts at the last conference call already asked about raising 99FY estimates, and the company asked them to stand pat for now. I believe that is because they weren't certain how the MarQ would look, and wanted to wait until after these numbers were out before revising guidance to the analysts.
Marks has said, if the acquisition pace slows down, margins will improve. And at Robby Stephens, he said that they're are not looking for acquisitions now. In fact, he ridiculed the idea. He took issue with the "wheeler-dealer label", and said the acquisitions that they have done in the last two years were needed to position the company strategically. Now they have their geographic locations, and don't plan any more acquisitions (caveat: unless an important customer asks them to consider one). He joked that every investment banker out there seems to be sending him every kind of deal imaginable, and he just shook his head. "I'm just not interested any more. Making acquisitions is not the fun part. Meeting with customers and employees, and growing the business is the fun part. And that's what the management team intends to do."(paraphrased a bit by me)
On the recent insider sales, the number of shares is almost meaningless. Example: Every quarter, Jabil management sells a few shares, and some on that thread fixate on that, yet the size of the sales are relatively small, and have had no predictive power whatsoever regards the future price of the stock.
(off-topic: Lets talk ACTM on that thread- current fire sale looks interesting, but I've been burned a bit there.)
Paul |
