To: Return to Sender who wrote (28052 ) 9/8/2000 1:30:04 PM From: Johnny Canuck Respond to 12:57 ET ******A note out of Lehman Bros. suggests that it soon may be time to take some profits. First, a qualifier: fundamentals remain strong industry wide, and for long-term investors, the sector remains very attractive. Jabil Circuit shares recently broke through to new 52-week highs and are up over 20% in the past four weeks and over 90% YTD. The company is set to report Q4 results after the close Tuesday, September 19. While we have little doubt that JBL will once again post a strong quarter, we are concerned that some profit taking could follow the release. Lehman Bros. is too, their Q4 JBL preview is subtitled, "Will Great Results be Enough?" Of course it is impossible to predict overall market sentiment for a given day two weeks in advance, and a tech rally could lead JBL shares higher after the release, but with the run JBL shares have had, we suspect the odds are stacked in favor of some profit taking. That said, here's what we'll be looking for in the Q4 release. Earnings are projected to come in at $0.24 per share according to all 24 analysts polled by First Call. revenues should come in just north of $1 bln, which would represent y/y growth of over 90% from last year's $536.5 mln. in Q4. For the fiscal year, sales should add up to about $3.5 bln with EPS of $0.80. Very strong results are being factored in to JBL's share price, and while we expect the company to meet expectations, we're not sure that will be enough to keep the rally alive. However, three factors could work against a pullback: 1) Positive overall market sentiment, 2) JBL shares pull back in the next two weeks, allowing them to rally off the strong earnings release, 3) a major OEM contract win. Any combination of those factors could contribute to further momentum in JBL shares. - Matt Gould, Briefing.com
