Jabil Circuit (JBL) Q3 Earnings: What's In The Cards?
Zacks Investment Research | Jun 12, 2017 10:05PM ET
Jabil Circuit, Inc. (NYSE:JBL) is expected to report third-quarter fiscal 2017 results on Jun 14 after the closing bell. Last quarter, the company delivered stronger-than-expected results with a positive earnings surprise of 11.11%. Jabil Circuit has delivered an average positive earnings surprise of 51.27% in the trailing four quarters.
Let’s see how things are shaping up for this announcement.
Factors to Consider
We believe Jabil Circuit is poised to witness robust progress with its planned efforts to realign global capacity and administrative support infrastructure so as to optimize organizational effectiveness amid a sluggish macroeconomic scenario.
Further, the company’s ongoing realignment program is aiding it to significantly lower expenses while maintaining the production capacities, going forward. Despite the near-time negative impact of about $195 million over the next two years, it will eventually gain considerable benefits from this cost-savings initiative in the long term.
Jabil Circuit’s Electronic Manufacturing Services (EMS) segment (60% of fiscal 2016 revenues) is well positioned to demonstrate strong growth over the next few years. This will primarily be driven by emerging EMS sectors such as industrial, renewable energy, clean tech and medical, aided by escalating technology spending. Meanwhile, opportunities in healthcare and packaging businesses are likely to be growth catalysts for the company’s DMS segment.
For the third quarter, Jabil anticipates total net revenue to increase 2% (at mid point) year-on-year and be in the range of $4.25–$4.55 billion. Core operating income is estimated in the range of $90–$130 million.
On a year-over-year basis, revenues from Diversified Manufacturing Services are expected to increase 9% to $1.6 billion. Electronics Manufacturing Services revenues are anticipated to decrease 1% on a year-over-year basis to $2.8 billion.
Jabil Circuit, Inc. Price and EPS Surprise
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