Jabil Circuit 4th-Quarter Profit Up 53%, But Sees Rocky Path Ahead
By Tess Stynes
Jabil Circuit Inc.'s (JBL) fiscal fourth-quarter earnings rose 53%, but the contract electronics manufacturer projected fiscal first-quarter results below expectations.
Also, Jabil estimated that it will record roughly $35 million to $85 million in charges during the new fiscal year stemming from its exposure to BlackBerry Ltd. (BBRY, BB.T), Jabil's second-largest customer in the past fiscal year.
For the current quarter, the company forecast per-share earnings of 50 cents to 60 cents and revenue of $4.35 billion to $4.65 billion , below recent estimates of analysts polled by Thomson Reuters for per-share profit of 63 cents and revenue of $4.84 billion.
Jabil supplies circuit boards used in computers, cars and networking and telecom equipment. Jabil had mostly seen profits grow since 2009, though it has reported weaker earnings for the past five consecutive quarters.
Ahead of the earnings report, Stifel analysts expected weak demand for BlackBerry's new smartphone models could weigh on Jabil's performance in the latest quarter, but also were anticipating strong demand growth from Apple Inc. (AAPL) amid the rollout of its new iPhones. That rollout benefits from Jabil's acquisition recent of precision-plastics maker Nypro Inc.
For the period ended Aug. 31, Jabil reported a profit of $127 million, or 61 cents a share, up from $82.8 million, or 39 cents a share, a year earlier. The latest period included a tax benefit of $71 million. Excluding stock-based compensation, restructuring-related charges and other items, adjusted earnings were up at 56 cents from 54 cents. Revenue increased 11% to $4.8 billion.
The company expected an adjusted per-share profit of 50 cents to 58 cents on revenue of $4.45 billion to $4.65 billion
Gross margin was unchanged at 7.3%.
The company said its efforts to revamp its global manufacturing operations to better align them with market conditions and customer needs continued in the fiscal fourth-quarter, but didn't provide other details.
Shares were down 5.4% at $22.70 in recent after-hours trading.
Write to Tess Stynes at firstname.lastname@example.org
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