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Technology Stocks : Jabil Circuit (JBL) -- Ignore unavailable to you. Want to Upgrade?

To: Richard Haugland who wrote (2964)	3/11/1998 9:46:00 PM
From: WTMHouston	Read Replies (1) \| Respond to of 6317

Here is my take on earnings....First Call has the consensus at $0.51 for the quarter, with the low at .50 and the high at .51 There have not been any revisions in the last 90 days. The historical numbers (from SI and in JBIL press releases): Quarter Ending 08/31/96 11/30/96 02/28/97 05/31/97 08/31/97 11/30/97 Revenue 174.1 203.1 222.2 247.6 305.2 319.5 Net Income 6.5 8.8 11.1 14.6 18.0 19.1 Net Pft Mgn 3.7% 4.3% 5.0% 5.9% 5.9% 6.0% Shares (MM) 37.5 37.9 38.3 38.4 38.8 38.7 EPS .17 .23 .29 .38 .46 .49 .51 with 38.7MM shares is $19.737MM net profit @ 6.0% = $329MM revenues, which is an increase of less than 3% from the last quarter...even if we increase the shares to 39MM and decrease the margin to 5.9%, it results in profits of 19.89MM and revenues of $337MM, which is around 5.5% over last quarter. Either of these scenarios is VERY conservative and modest IMO. The .02 increase over last Q would be the smallest sequential quarter in at least the past 6. Given that JBIL management has said that they think that at least 30% annual growth is sustainable for now, that is 7.5% over last quarter, which is around $344MM in revenues...at 6.0% net margin, that is 20.6MM or just over .53 per share....If they happen to have a good quarter and revenues are up 9.5% to $350MM, it is $21MM net or just over $0.54/share... If margins increase, all the better...even if margins go down slightly, they are still likely to make or slightly excced their number. Given that they have been at a conference the last 2 days and there has been no bad news reported, given that they have not pre-released any bad news, given that everything they have said since the last earnings has been VERY positive, I would be surprised to hear anything bad next week. IMO, meeting estimates is a no brainer and exceeding them is well within the realm of reason. Add to this that even the conservative numbers will be around 50% above the same quarter last year, that JBIL will report them as "records," that it is trading at less than 19x 1998 earnings estimates (this is Q2 being reported), when the average is around 25x and their growth is at least 30% annually, and that their is trading volatility, I see this as a value play and an earnings play. Finally, the recent darkest days for this stock were just prior to the last earnings announcement....those that waited for earnings made a bundle. I may be all wrong and I may lose some money, but, like I said before, I like the odds.... Troy