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| Tuesday, June 13, 2006 |
Jabil Circuit Shares Slide As Company Cuts 3Q Operating Profit View, Maintains Sales Outlook
ST. PETERSBURG, Fla. -- Contract electronics manufacturer Jabil Circuit Inc. said Tuesday that third-quarter operating earnings will fall below prior expectations, due to electromechanical operational issues and difficulties with certain U.S. production and repair facilities.
The news sent shares tanking 14.4 percent in pre-market activity, falling $4.67 to $27.75. The shares, which closed Monday at $32.42, have traded in a range of $28.30 and $43.70 in the past year.
Jabil reiterated that third-quarter net income will range between 26 cents and 30 cents per share, and maintained its sales forecast at $2.5 billion to $2.6 billion. However, the company lowered estimates for earnings, excluding items, to between 33 cents and 37 cents per share, compared with prior guidance of 43 cents per share.
Analysts polled by Thomson Financial are looking for earnings before items of 43 cents per share on sales of $2.6 billion, on average.
"We are disappointed with our financial performance in the third fiscal quarter of 2006 and are committed to improving our operational and financial performance," president and chief executive Timothy L. Main said in a statement. "Despite these short-term challenges, we are optimistic about the future. Revenues continue to show strong growth and we continue to expect core earnings for the quarter and for the year to exceed prior year levels."
In a note Tuesday, Bank of America analyst Scott Craig called the guidance revision "unexpected and meaningful." The adjustment implies a $22 million operating income shortfall and a 3.6 percent operating margin, compared with Craig's estimate of 4.5 percent, he said. |
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