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Jabil Circuit Shares Rise on Expectations for Long-Term Growth (JBL)

Shares of Jabil Circuit Inc. (NYSE: JBL), a provider of worldwide electronic manufacturing services and solutions, are up sharply in trading today on expectations for long-term growth.

JBL shares are gaining even as the company forecast weaker-than-expected fourth-quarter. The company also reported its third-quarter results.

Despite weaker-than-expected outlook, analysts believe that the current quarter could be a turning point for St. Petersburg, Florida-based company.

Matthew Sheerin, analyst at Stifel Nicolaus, said in a research note to clients that he expects margins to expand again beginning in the first quarter of fiscal 2013 and remains favorable on the long-term story, despite near-term headwinds.

For the fourth quarter, Jabil forecasts adjusted profit of $0.54-$0.66 per share on revenue of $4.1-$4.35 billion. This compares with average analysts’ estimate of earnings of $0.67 per share on revenue of $4.37 billion.

For fiscal 2013, Jabil expects sales to rise between 10% and 15%.

Jabil’s third-quarter net income came in at $101.3 million, or $0.48 per share. Revenue for the quarter was $4.3 billion, compared to consensus forecast of $4.3 billion. On an adjusted basis, the company’s earnings for the quarter were $0.64 per share, in-line with Street estimates.

CEO Timothy L. Main said that JBL is delighted with the outstanding performance of its Diversified Manufacturing Services sector overall and is actively expanding its capacity in order to meet the growing demands of numerous customers and products. Main said that the ramp-up of new products, combined with a specific customer challenges and muted end-markets give JBL plenty to focus on in the fourth quarter. He added that JBL believes success in the fourth quarter will set the stage for a brisk fiscal 2013 and a continuation of record setting years.

At last check, JBL shares were trading 6.54% higher at $20.69. Year-to-date, the stock gained 4.83%, underperforming the broad market.

 


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