Jabil Circuit Cuts Year Forecast
March 16 2016 - 5:30PM
Dow Jones News
Jabil Circuit Inc. on Wednesday cuts its guidance for the year
and projected downbeat results for the current quarter, warning of
weaker demand in its mobility segment.
Shares, down 1.2% over the past 12 months, fell 8% to $20.20 in
after-hours trading.
The electronics supplier projects third-quarter core profit of
12 cents to 18 cents a share on $4.1 billion to $4.3 billion in
revenue, with diversified manufacturing services revenue projected
to fall 10% from the year-ago period.
Analysts surveyed by Thomson Reuters projected 51 cents a share
in core profit on $4.75 billion in revenue.
For the year, it now projects $2.12 a share in core profit on
$18.5 billion in revenue, compared with its earlier view of $2.65 a
share in core profit on $20 billion in revenue.
Founded in 1966, the St. Petersburg, Fla., company makes
products for technology companies like Apple Inc. and Cisco Systems
Inc. Apple accounted for 24% of its revenue in 2015.
Because of that, Jabil's financial results have largely mirrored
the upswing in the tech market.
In 2014, Jabil was forced to restructure operations after ending
business with BlackBerry Ltd., which had been its second largest
customer by volume, accounting for 12% of its revenue in 2013.
Over all, for the period ended Feb. 29, Jabil reported a profit
of $78.9 million, or 41 cents a share, compared with $52 million,
or 27 cents a share, a year earlier. Excluding stock-based
compensation and other items, profit rose to 57 cents from 50 cents
a year earlier.
Revenue rose 2.2% to $4.40 billion.
Jabil had projected core profit of 54 cents to 70 cents a share
on revenue on $4.4 billion to $4.7 billion in revenue.
Gross margin improved to 9.1% from 8.5% a year earlier.
Revenue in the electronics manufacturing services segment, which
still accounts for more than half of its revenue and caters to
clients in such areas as automotive and the so-called
connected-home business, rose to $2.7 billion from $2.63 billion a
year earlier. Previously, Jabil had forecast an increase of up to
5% for the current year.
The diversified manufacturing services segment—which caters to
the defense and aerospace industry, health care and so-called
wearable tech—was at $1.7 billion, compared with $1.68 billion a
year earlier. Jabil had earlier projected a roughly 14% increase to
$1.9 billion for the quarter and had targeted a 8% to 12% segment
revenue increase for the year.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
March 16, 2016 17:15 ET (21:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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