Electronic manufacturing services and solutions provider Jabil Circuit Inc. (JBL) is scheduled to release second-quarter results on Tuesday, March 24, at 4:00pm ET. Like other sectors, the electronics industry is also reeling from the recession, experiencing a steep drop in demand, as consumers rein in discretionary purchases and companies curb their electronics and IT spending.
The consumer electronics industry is projected to generate $171 billion in U.S. shipment revenues in 2009, down 0.6% from 2008, according to the semi-annual industry forecast released by the Consumer Electronics Association.
Jabil Circuit makes products for companies including network gear supplier Cisco Systems, mobile phone giant Nokia and PC stalwart Hewlett-Packard.
While announcing first-quarter results, the company said it expects second-quarter core earnings per share in the range of $0.12-$0.16. Including one-time items, earnings are estimated to be $0.04-$0.08 per share. Revenue for the second quarter is projected in the range of $2.8 billion - $3.0 billion, with an estimated core-operating margin of 2.1%.
Analysts polled by Thomson Reuters expect the company to report earnings of $0.13 per share on revenues of $2.82 billion for the quarter. Analysts' estimates typically exclude special items. In the year-ago period, the company reported net loss of $24.0 million or $0.12 per share on revenues of $3.1 billion.
For the first quarter, the company initially announced a preliminary profit and after finalizing goodwill impairment charges, revised the results to a net loss.
On December 19, the contract electronics manufacturer said its preliminary first-quarter profit declined over 25% to $46.22 million or $0.22 per share from $62 million or $0.30 per share in the year-ago period, citing the economic slowdown. Core earnings fell from the previous year and missed analysts' estimate. Net revenue grew to $3.382 billion from $3.368 billion in the same period last year.
A month later, the company finalized its preliminary goodwill impairment analysis for the first quarter, and recorded a charge estimated at $318 million. Counting in the charges, the company has revised first-quarter results to a net loss of $275.86 million or $1.34 per share, from prior earnings forecast of $46.22 million or $0.22 per share.
St. Petersburg, Florida-based Jabil recently announced its plan to cut its manufacturing capacity in certain geographies and to shrink its worldwide workforce of 85,000 by about 3,000.
Jabil expects to realize $55 million in annualized cost savings from its restructuring plan. Currently, the company expects to recognize about $65 million in pre-tax restructuring and impairment costs over the course of fiscal years 2009 and 2010.
Among others in the field, Flextronics International Ltd. (FLEX) in March announced restructuring plans aimed at rationalizing company's global manufacturing capacity and infrastructure to overcome the current macroeconomic conditions and lower demand from its Original equipment Manufacturer or OEM customers. The restructuring activities include a reduction in workforce and capacity.
The Singapore-based Flextronics said it expects to record annualized savings in the range of $230 million - $260 million upon the completion of restructuring activities as it expects a reduction in selling, general and administrative operative expenses. Yet, it expects to incur pretax restructuring and impairment costs in the range of $220 million - $250 million over the course of the company's fiscal years 2009 and 2010.
Another peer, Sanmina-SCI Corp. (SANM) reported first-quarter net loss of $25.27 million or $0.05 per share, negatively impacted by more than 20% drop in revenues during the three-month period. The company said it expects second quarter non-GAAP earnings per share at break-even on revenues of about $1.3 billion.
JBL shares, which have been trading between $3.10 and $18.78 in the past 52 weeks, closed Monday's trading session at $4.31, up 34 cents or 8.56% on a volume of 4.08 million shares.
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