Dividend.com: Jabil Short-Circuited

Jabil Circuit Sees Trouble Ahead

Jabil Circuit (JBL Quote) just announced its second-quarter revenue will come in below Wall Street's expectations.

The company is now forecasting earnings of 4 cents to 8 cents per share on sales of $2.8 billion to $3 billion, which is below consensus estimates of 20 cents per share on sales of $3.07 billion.

Management said it will be assessing present opportunities to ensure a more robust future when end markets stabilize and the recovery cycle begins.

We had removed shares of Jabil Circuit from our "Recommended" list on Sept. 3, when the stock was trading at $15.59. The company has a 4.33% dividend yield, based on last night's closing stock price of $6.46. The stock has technical support around the $5 price area, but any break of that and the name could test the $2.50 to $3.00 area. The company does have about $2 per share in cash, so the downside is not significant beyond that. We would still prefer to look elsewhere for better investment opportunities.

Jabil Circuit is not recommended at this time, holding a Dividend.com Rating of 2.8 out of 5 stars.

Potash Cuts 2008 Profit Forecast

Potash (POT Quote) announced late Thursday that it is cutting its 2008 profit outlook.

The company is seeing weaker volumes in all three nutrients, along with lower prices and constrained margins in nitrogen and phosphate segments. The company is feeling the pullback in demand for crop nutrients as a result of the global economic crisis.

Management now sees 2008 EPS coming in at $10.75, which is 10% below the midpoint of the last forecast the company offered.

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