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Stocks J / Jabil Circuit, Inc.
|Subject: Good results reported||Date: 6/21/2007 6:28 PM|
|Author: ultrabrite||Number: 857 of 860|
Jabil Reports Third Quarter Results
Thursday June 21, 4:01 pm ET
Revenue Increases 16 Percent
ST. PETERSBURG, Fla.--(BUSINESS WIRE)--Jabil Circuit, Inc. (NYSE:JBL - News), today reported results for its third quarter of fiscal 2007, ended May 31, 2007. "We are pleased with the improvements we have made both in operating efficiencies and progress on our balance sheet metrics," said President and C.E.O. Timothy L. Main.
Third Quarter 2007 Operational and Balance Sheet Sequential Highlights
GAAP operating margin decreased eight percent. Core operating margin improved 57 percent.
GAAP earnings decreased $.04 per fully diluted share. Core earnings increased $.09 per fully diluted share.
Cash flow from operations for the quarter was approximately $192 million.
Third quarter sales cycle improved from 29 days in the second quarter to 26 days.
Annualized inventory turns improved from seven turns in the second quarter to eight turns.
Core Return on Invested Capital increased to 10 percent from seven percent in the second quarter.
A $0.07 dividend was paid on June 1, 2007.
Third Quarter 2007 Year-over-Year Results
Net revenue for the third quarter of fiscal 2007 increased to $3.0 billion compared to $2.6 billion for the same period of fiscal 2006. On a GAAP basis, operating income for the third quarter of fiscal 2007 decreased to $33.6 million compared to $77.3 million for the same period of fiscal 2006. On a GAAP basis, net income for the third quarter of fiscal 2007 decreased to $6.2 million compared to $64.2 million for the same period in fiscal 2006. GAAP diluted earnings per share for the third quarter of fiscal 2007 decreased to $0.03 compared to $0.30 for the same period of fiscal 2006.
Jabil's third quarter of fiscal 2007 core operating income decreased to $87.1 million or 2.9 percent of net revenue compared to $93.4 million or 3.6 percent of net revenue for the third quarter of fiscal 2006. Core earnings decreased to $47.4 million compared to $78.5 million for the third quarter of fiscal 2006. Core earnings per share decreased to $0.23 per diluted share for the period compared to $0.36 for the third quarter of fiscal 2006.
"We will continue to focus on making step by step improvements in our operational efficiency and in our financial performance. We believe we are on the right path and intend to demonstrate this to our investors over the next several quarters," said President and C.E.O. Timothy L. Main.
Jabil said it expects revenue for its fourth fiscal quarter of 2007 to remain at the $3.0 billion level, with an estimated core operating margin range of 3.0 to 3.5 percent. The company said its core earnings per share are anticipated to be in a range of $0.25 to $0.31 per diluted share. Under GAAP, earnings per share are estimated to be $0.07 to $0.16 per diluted share. (Expected GAAP earnings per share for the fourth quarter of fiscal 2007 are currently estimated to include $0.04 per share for amortization of intangibles, $0.05 per share for stock-based compensation and related charges and $0.06 to $0.09 per share for restructuring and impairment charges.)
(Click the above link to view the full press release.)
I listened to the conference call and the tone sounded generally upbeat. Although earnings were down and SG&A expense was up significantly from a year ago, and they didn't say anything specific about fiscal 2008, I got the feeling that the worst is over for now and that they expect progress to be made over the next 18 months in restructuring operations. They also mentioned winning some new business.
They said the overall economic environment is not getting better or worse for them, although they mentioned that Flextronics purchasing Solectron continues an industry trend towards consolidation. They now feel they have the necessary scale to compete with the larger players in the industry. Jabil lists themselves third behind Foxconn (Hon-Hai) and Flextronics. I think they were also saying that through consolidation industry pricing might improve, rather than having the cut-throat pricing that has been making life tough for many companies in the industry.
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