Jabil Circuit Earnings: Margin Growth Gratifying

S&P 500 (NYSE:SPY) component Jabil Circuit Inc. (NYSE:JBL) reported its results for the third quarter. Jabil Circuit is an independent provider of electronic manufacturing services and solutions. It is engaged in the design, production of electronics, and it offers product management and aftermarket services to companies in a wide range of industries, such as the aerospace, defense, medical and telecommunications sectors.

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Jabil Circuit Inc. Earnings Cheat Sheet

Results: Net income for Jabil Circuit Inc. fell to $101.6 million (48 cents per share) vs. $104.7 million (47 cents per share) a year earlier. This is a decline of 3% from the year-earlier quarter.

Revenue: Rose 0.5% to $4.25 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Jabil Circuit Inc. fell short of the mean analyst estimate of 56 cents per share. Analysts were expecting revenue of $4.29 billion.

Quoting Management: “We are pleased to post core EBITDA margins of 6.5 percent in the quarter, our highest level since 2005. Core operating margins also expanded to 4.5 percent,” said Timothy L. Main, President and CEO of Jabil. “This is particularly gratifying during a period of more subdued revenue growth for the company overall.”

Key Stats:

Last quarter’s profit decrease ends a four-quarter streak of profit increases. In the second quarter, net income rose 76.3% from the year earlier, while the figure increased 5.8% in the first quarter, 94.7% in the fourth quarter of the last fiscal year and more than twofold in the third quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 7.8% to $4.24 billion in the second quarter. The figure rose 6% in the first quarter from the year earlier and climbed 10.9% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company has now fallen short of analyst estimates for the last three quarters. It missed the mark by one cent in the second quarter and by 2 cents in the first quarter.

Looking Forward: Over the past ninety days, the average estimate for the fourth quarter has fallen from 63 cents per share to 62 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. The average estimate for the fiscal year is $2.24 per share, a rise from $2.23 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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