Jabil Circuit, Inc. (NYSE: JBL) in the second quarter has reported the adjusted earnings per share of $0.48, beating the analysts’ estimates for the adjusted earnings per share of $0.46. The company had reported the adjusted revenue of $4.4 billion in the second quarter, beating the analysts’ estimates for revenue of $4.37 billion. As a result, the stock surged over 2% on March 16th, 2017 (as of 9:41 AM EDT; Source: Google finance).
Moreover, for the second quarter, the Non-U.S. GAAP core operating income was $152.2 million and all the businesses delivered at or above plan.
Jabil Circuit is continuing to gain from the fast-growing sectors like industrial, renewable energy, clean tech and medical. Moreover, the increase in technology spending bodes well for Jabil’s top line. Though the company’s realignment program will have an adverse effect on its financial position over the next two years, it will eventually boost its growth and market share.
However, Jabil Circuit Diversified Manufacturing Services (DMS) segment has suffered owing to weakness in demand for Apple Inc.’s AAPL iPhone. However, with the success of iPhone 7 & and 7 Plus, the performance of the DMS segment should improve. Apple continues to be Jabil Circuit leading customer, accounting for nearly 24% of its total revenue. The escalating market competition and macroeconomic headwinds continue to be concerned.
In the third quarter, the earnings per share are expected to be $0.16 to $0.39, which is a very wide range that could miss the analysts’ estimates of $0.28. JBL also expects the third quarter revenues in the range of $4.25 to $4.55, which is below the analysts’ consensus of $4.38. On a year-over-year basis, the revenues from Diversified Manufacturing are expected to decrease 2% to $1.7 billion, due to the weakness in the mobility business. The Electronics Manufacturing Services revenues of $2.65 billion are expected to be flat on a year-over-year basis.
Jabil Circuit has recently completed the asset purchase of Lewis Engineering in a transaction. The transaction opens the new markets to the previously privately held Lewis and will give JBL the ability to expand its global services
Jabil Circuit had declared a quarterly dividend of $0.08 per share to shareholders of record as of February 15th, 2017 and the dividend were payable on March 1st, 2017.
On the other hand, as per tipranks.com, 3 analysts has covered the stock while recommending a “Hold”. But, Jabil Circuit has an average price target of $27, which is a further downside of 0.07%.