Reduced Mobility Demand May Hamper Jabil's Q3

(RTTNews) - Contract electronics manufacturer Jabil Circuit Inc. (JBL) is slated to release its third-quarter numbers after the bell on Wednesday, June 14, with analysts polled by Thomson Reuters estimating earnings of $0.16 per share on revenue of $4.18 billion. Analysts' estimate typically exclude certain special items.

The sharper-than-expected decline in product demand within the DMS segment during the second quarter, deepened into a downturn, significantly impacting the company's third quarter.

For the third-quarter, Jabil expects adjusted earnings of $0.12 - $0.18 per share, revenue of $4.1 billion - $4.3 billion and its midpoint decline of 4% on a year-over-year basis reflective of demand reductions in its mobility business.

Core operating income is estimated to be in the range of $80 million - $100 million, with core operating margins in the range of 2% - 2.3%. GAAP results are expected to be in the range of a loss $0.05 per share - profit $0.03 per share.

For the fiscal 2016, the company now expects adjusted earnings of about $2.12 per share and revenues of $18.5 billion. Analysts currently estimate earnings of $2.10 per share on revenues of $18.45 billion. Core operating income for the full fiscal year is now estimated to be $700 million.

Previously, Jabil expected adjusted earnings of around $2.65 per share and revenues of about $20 billion for 2016.

In The Last Quarter...

Jabil Circuit reported higher profit for the second quarter, driven largely by growth in revenues. However, Jabil's earnings and revenues for the quarter fell short of Wall Street estimates.

St. Petersburg, Florida-based Jabil's second-quarter profit increased to $78.9 million or $0.41 per share from $52.0 million or $0.27 per share last year.

Excluding one-time items, core earnings for the quarter rose to $109.3 million or $0.57 per share from $98.3 million or $0.50 per share last year. Analysts expected earnings of $0.60 per share.

Revenues for the quarter grew 2% to $4.4 billion from $4.3 billion a year ago. Analysts had a consensus revenue estimate of $4.5 billion for the quarter.

"I'm pleased to report second quarter results that were largely in line with our guidance and expectations," said CEO Mark Mondello. "The performance of our EMS segment was outstanding and above expectations, while our DMS segment grew modestly as we faced a slight downturn in product demand late in our fiscal quarter specific to our mobility business."