Tuesday, February 11, 2014

Earnings Review - Jabil’s Poor Guidance Was Bad News for Apple

Jabil Circuit (JBL), a manufacturer of electronic components for some of the leading tech companies like Apple (AAPL) and Cisco (CSCO), has shaken the confidence of its investors following its recent earnings release. The business not only missed the analysts’ earnings estimates, but also gave a weak guidance for the current quarter. Besides this, the company has also announced that it will sell its aftermarket services unit, which is responsible for providing warranty repair services for consumer electronics.

Following the earnings release, the company’s shares dropped by more than 20% on Dec. 18, which is the single biggest drop in nearly six years. The shares still haven’t recovered and are trading just 0.2 times Jabil’s trailing sales.

Earnings Overview

During the quarter, Jabil’s revenues were nearly flat from the corresponding quarter last year, showing a decline of less than 1% to $4.61 billion. The company’s net income rose 11.8% year-over-year to $118.07 million, or $0.57 per share. However, excluding the impact of one-off items, Jabil’s adjusted earnings, which the company refers to as core diluted earnings per share, fell to... read full article at GuruFocus