Filed under: Earnings reports, Forecasts, Bad news, Competitive strategy, Analyst initiations, Technology
Shares of Jabil Circuit Inc. (NYSE: JBL) have been plunging in today’s session after the company issued second-quarter guidance below analysts’ expectations last night, despite posting an increase for its first-quarter profit .
The electronics manufacturing service provider reported growth of 50% for its first-quarter profit, which climbed up to $62 million or 30 cents per share. The quarter’s results were helped by strong sales in the networking and storage markets.
Excluding special items, the company showed profit in line with the 36 cents analysts had forecast. The company posted a 5% jump in sales during the quarter and reported revenue of $3.37 billion, slightly above analysts’ predictions of $3.3 billion.
Looking ahead, the company anticipates second-quarter results below analysts’ expectations as it plans to restructure its business. Jabil expects reporting second quarter results somewhere between a loss of 3 cents per share and a profit of 1 cent per share. Analysts estimates called for earnings of $1.50 per share.
Shares have been taking a beating this day, with sellers pushing the stock down over 21%, or $3.98, all the way to $14.44.
Despite the company’s guidance, some analysts aren’t too pessimistic over Jabil’s future profit. One analyst at Robert W. Baird & Co., Reik Read, believes that Jabil’s restructuring program should help its growth and margins and maintained his “Outperform” rating and $20 price target on the stock.
Let’s watch the market to see its reactions to the company’s reports and forecast. So far it doesn’t look too encouraging.
Eliza Popescu is a financial writer for the on the web investment advisory service Investor’s Observer.
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