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Jabil Circuit Inc. (JBL - Free Report) ) reported better-than-expected first-quarter fiscal 2017 results. Adjusted earnings (including share-based compensation but excluding all one-items) of 69 cents per share surpassed the Zacks Consensus Estimate of 58 cents.
Quarter Details
Revenues of $5.1 billion beat the Zacks Consensus Estimate of $4.93 billion but were lower than the prior-year quarter’s figure of $5.2 billion.
Electronics manufacturing services revenues (representing 53% of revenues) came in at about $2.7 billion, down 1% year over year. Diversified Manufacturing Services revenues (47% of revenues) decreased 3% year over year to $2.4 billion.
Operating Details
Gross margin contracted 80 basis points (bps) on a year-over-year basis to 8.5%.
The company’s core operating income decreased to $165.6 million from $214.5 million in the year-ago quarter.
Exiting the quarter, cash and cash equivalents were $747 million, compared with $1.13 billion year over year.
Cash flow from operations for the first quarter of fiscal 2017 was $152 million compared with $145.5 million in the year-ago period.
Restructuring Program
Apart from the quarterly results, the company declared that it will continue with its plans to realign its global capacity and administrative support infrastructure so as to optimize organizational effectiveness amid a sluggish macroeconomic scenario. The company incurred $36 million as expenses for headcount reduction this quarter.
In fiscal 2017, the company expects $20 million to $30 million in cost savings due to restructuring efforts.
Guidance
The company initiated guidance for the second quarter of fiscal 2017.
For the second quarter, Jabil expects total company net revenue to decrease 1% (at mid point) year over year and be in the range of $4.2 billion to $4.5 billion. Core operating income is estimated in a range of $125 million to $165 million.
On a year-over-year basis, revenues from Diversified Manufacturing are expected to decrease 2% to $1.7 billion, given softness in the mobility business. Electronics Manufacturing Services revenues of $2.65 billon are expected to be flat on a year-over-year basis.
The company expects GAAP earnings in a range of a loss of 18 cents to income of 18 cents.
Currently, Jabil Circuit has a Zacks Rank #3 (Hold).The company has posted a negative return of 7.39% as against the Zacks Electronic Manufacturing System industry’s gain of 24%.
Better-ranked stocks in the broader tech space include TiVo Corp. , Facebook Inc. and LivePerson, Inc. (LPSN - Free Report) . TiVo sports a Zacks Rank #1 (Strong Buy) while Facebook and LivePerson carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
TiVo has delivered an average positive earnings surprise of 97.76% in the trailing four quarters while Facebook and LivePerson have delivered positive earnings surprises of 21.11% and 56.43%, respectively over the same time frame.
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Jabil Circuit (JBL) Q1 Earnings & Revenues Beat Estimates
Jabil Circuit Inc. (JBL - Free Report) ) reported better-than-expected first-quarter fiscal 2017 results. Adjusted earnings (including share-based compensation but excluding all one-items) of 69 cents per share surpassed the Zacks Consensus Estimate of 58 cents.
Quarter Details
Revenues of $5.1 billion beat the Zacks Consensus Estimate of $4.93 billion but were lower than the prior-year quarter’s figure of $5.2 billion.
Electronics manufacturing services revenues (representing 53% of revenues) came in at about $2.7 billion, down 1% year over year. Diversified Manufacturing Services revenues (47% of revenues) decreased 3% year over year to $2.4 billion.
Operating Details
Gross margin contracted 80 basis points (bps) on a year-over-year basis to 8.5%.
The company’s core operating income decreased to $165.6 million from $214.5 million in the year-ago quarter.
JABIL CIRCUIT Price, Consensus and EPS Surprise
JABIL CIRCUIT Price, Consensus and EPS Surprise | JABIL CIRCUIT Quote
Balance Sheet & Cash Flow
Exiting the quarter, cash and cash equivalents were $747 million, compared with $1.13 billion year over year.
Cash flow from operations for the first quarter of fiscal 2017 was $152 million compared with $145.5 million in the year-ago period.
Restructuring Program
Apart from the quarterly results, the company declared that it will continue with its plans to realign its global capacity and administrative support infrastructure so as to optimize organizational effectiveness amid a sluggish macroeconomic scenario. The company incurred $36 million as expenses for headcount reduction this quarter.
In fiscal 2017, the company expects $20 million to $30 million in cost savings due to restructuring efforts.
Guidance
The company initiated guidance for the second quarter of fiscal 2017.
For the second quarter, Jabil expects total company net revenue to decrease 1% (at mid point) year over year and be in the range of $4.2 billion to $4.5 billion. Core operating income is estimated in a range of $125 million to $165 million.
On a year-over-year basis, revenues from Diversified Manufacturing are expected to decrease 2% to $1.7 billion, given softness in the mobility business. Electronics Manufacturing Services revenues of $2.65 billon are expected to be flat on a year-over-year basis.
The company expects GAAP earnings in a range of a loss of 18 cents to income of 18 cents.
Currently, Jabil Circuit has a Zacks Rank #3 (Hold).The company has posted a negative return of 7.39% as against the Zacks Electronic Manufacturing System industry’s gain of 24%.
Better-ranked stocks in the broader tech space include TiVo Corp. , Facebook Inc. and LivePerson, Inc. (LPSN - Free Report) . TiVo sports a Zacks Rank #1 (Strong Buy) while Facebook and LivePerson carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
TiVo has delivered an average positive earnings surprise of 97.76% in the trailing four quarters while Facebook and LivePerson have delivered positive earnings surprises of 21.11% and 56.43%, respectively over the same time frame.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>