Jabil Profit Declines, But Top Estimates; Details Strong Outlook

(RTTNews) - Contract electronics manufacturer Jabil Circuit Inc (JBL), on Wednesday reported a decline in first-quarter profit, hurt mainly by stock-based compensation costs that offset a 5 percent rise in revenues, while the prior year included gains from discontinued operations and favorable tax adjustments.

Excluding items, core earnings for the quarter increased from last year, with both earnings and revenue topping Wall Street estimates. Jabil provided a strong guidance for the second quarter.

"We had a very strong start to the fiscal year as our team exceeded expectations," said Mark Mondello, Jabil's chief executive officer. "Our results reflect strong demand within our Diversified Manufacturing Services segment as well as solid execution and performance across the entire business."

Jabil posted first-quarter net income of $72 million or $0.37 per share, compared with $118 million or $0.57 per share last year.

Results for the quarter included stock-based compensation expense of $17.7 million, compared with a gain of $22.6 million last year. The prior year included $16 million gain from discontinued operations and a favorable $9 million related to acquisition costs and certain purchase accounting adjustments.

Excluding items, core earnings for the quarter were $0.55 per share, compared with $0.43 per share a year ago.

On average, 11 analysts polled by Thomson Reuters expected earnings of $0.48 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the first quarter climbed to $4.55 billion from $4.34 billion in the prior year. Nine analysts had a consensus revenue estimate of $4.34 billion for the quarter.

Income tax expense for the quarter increased to $39.8 million from $19.7 million last year.

For the second quarter, Jabil projects core earnings of $0.39 to $0.50 per share and revenues of $4.15 billion to $4.35 billion.

Analysts currently expect the company to earn $0.38 per share on revenues of $4.12 billion for the quarter.

For the full year 2015, Jabil now projects core earnings of $1.85 to $2.15 per share, an increase from prior guidance of $1.65 to $1.95 per share; and expect revenues of $17.5 billion to $18.5 billion.

Analysts currently expect the company to report earnings of $1.79 per share on revenues of $17.17 billion for the year.

Jabil customers are spread among numerous industries, including healthcare, life sciences, clean technology, instrumentation, defense, aerospace, automotive, computing, storage, consumer products, networking and telecommunications.

JBL closed Wednesday at $20.07, up $0.38 or 1.93%, on a volume of 2.9 million shares. In after hours, the stock gained $0.85 or 4.24% at $20.92.