Jabil Circuits Q2 Profit Falls 9%, Misses Estimates; Sees Q3 Earnings Below View (JBL)

After the closing bell on Wednesday, electronics components maker Jabil Circuit, Inc. (JBL) reported a decline in second quarter profit due to higher-than-expected costs. Adjusted net income missed Wall Street expectations, while revenue topped views.

The St. Petersburg, Florida-based company posted a second quarter net income of $88.5 million, or 43 cents per share, down about 9% from $97.7 million, or 46 cents per share, earned a year ago.

Excluding certain items, Jabil’s core earnings in the second quarter were $109.3 million, or 53 cents per share, down from $123.2 million, or 58 cents per share, a year earlier. According to analysts polled by Thomson Reuters, the company was expected to earn 54 cents per share in the quarter.

A reason for the decline in net income were was that Jabil agreed to buy Nypro, a Massachusetts-based plastics manufacturer, in February for $665 million; the costs related to the purchase squeezed profits. Though most of the costs related to the acquisition will be incurred in the third quarter, Jabil did have about $5 million more than expected costs related to the deal in the second quarter.

The company’s quarterly revenue did rise about 4% to $4.42 billion, up from $4.24 billion in the same quarter last year. Analysts were expecting Jabil to see $4.38 billion in revenues.

Looking forward to the third quarter, Jabil is expecting to earn 40 cents to 48 cents per share, with adjusted earnings per share between 50 cents and 58 cents; revenue is expected to be between $4.3 billion and $4.5 billion. However, this is below analysts’ expectations of the company earning 61 cents per share on revenue of $4.52 billion.

Jabil Circuit shares were down 49 cents, or -2.52%, during pre-market trading on Thursday. The stock is down -27.37% over the past year.

The Bottom Line
Shares of Jabil Circuit (JBL) have a dividend yield of 1.64% based on last night’s closing price of $19.48 and the company’s annualized dividend payout of 32 cents per share.

Jabil Circuit, Inc. (JBL) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.0 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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