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

To: patroller who wrote (4986)	3/3/1999 3:07:00 PM
From: Finder	Respond to of 6317

March 3, 1999 Jabil Circuit Shrs Off 7% After 3Com Profit Warning Dow Jones Newswires NEW YORK -- Shares of electronics contract manufacturer Jabil Circuit Inc. (JBL) lost as much as 7% Wednesday in the wake of a profit warning from networking giant 3Com Corp. (COMS), one of its customers. 3Com will contribute about 5% to Jabil's top line in the current fiscal year, Jabil spokeswoman Beth Walters said, down from 18% in fiscal 1998. Walters played down the potential impact of 3Com's problems. Jabil makes high-gigabyte data-networking devices for 3Com, not products the larger company "is having problems with at this point," Walters said. Late Tuesday, 3Com, Santa Clara, Calif., said it will miss Wall Street's targets for revenue and earnings in the fiscal third quarter because of slower sales to businesses. For the period, 3Com expects earnings one-third below the 36 cents analysts had forecast. Jabil has suffered from problems at 3Com before. In late 1997 and early 1998, 3Com warned investors about curbed profits because of an inventory clear-out. "When 3Com's business dried up last year, 3Com decided to pull some business out of Jabil's factories and do it themselves," explained Michael Zimm, an analyst for CIBC Oppenheimer Corp. Jabil expects to report results for its fiscal second quarter ended in February on March 16. Walters wouldn't give specific details, but said sales to 3Com in that quarter grew 13% from the year-ago period. Also, Zimm said some investors may be concerned about the possible dilution of Jabil stock caused by a secondary offering of 10.5 million common shares, planned for this week or next. Walters played down the possible effect of Wednesday's hiccup on the price of the offering. "If the deal priced at this level," there would be dilution, Walters said. She said a delay of the offering was "possible." The company is conducting a series of road shows to plug the new shares this week. NYSE-listed Jabil stock traded recently at 30 9/16, off 1 3/16, or 3.7%, after earlier falling to 29 1/2. Volume reached 1.2 million, compared with average daily turnover of 867,000. 3Com shares, meanwhile, fell 3, or 11.1%, to 24, on Nasdaq volume of 45 million shares, compared with the daily average of 8.7 million.