Jabil Circuit's Revenue Jumps 41%

Updated from Dec. 17

After announcing big year-over-year increases in first-quarter earnings and revenue, Jabil Circuit(JBL Quote) on Thursday is being rewarded with a big bounce in share prices. As of 11:20 a.m. EST, the stock was up $2.18, or 8.1%, to $28.99.

After the close Wednesday, the company reported that revenue in the first quarter of fiscal 2004 rose 41% on the year to $1.51 billion.

The St. Petersburg, Fla., contract manufacturer posted a profit of $42.5 million, or 20 cents a share, compared to $8.4 million, or 4 cents a share, in the year-earlier period, according to generally accepted accounting principles. Core, or pro forma, earnings were 25 cents a share, 2 cents better than what Wall Street was expecting. Analysts polled by Thomson First Call were expecting revenue of $1.4 billion in the November quarter.

Looking to the second quarter, the company expects to earn a core profit of 20 cents to 22 cents a share on sales ranging from $1.35 billion to $1.40 billion. Wall Street was expecting earnings of 21 cents per share on sales of $1.33 billion. The company also raised guidance for fiscal 2004, saying revenue will range from $5.7 billion to $5.9 billion and earnings per share will range from 93 cents to 97 cents. That's 2 cents better than expectations.

Although the electronics market appears to be rebounding from several tough years, Jabil hasn't stood out.

Cisco Systems(CSCO Quote), Jabil's largest customer, is rumored to have shifted some of its low-end business from Jabil to Taiwanese contract manufacturer Hon Hai. Deutsche Bank analyst Chris Whitmore said the company's revenue from Cisco was off 11% year to year in fiscal 2003, and that the bleeding will continue in 2004.

However, Alex Blanton of Ingalls & Snyder said that while the dollar value of Cisco's business with Jabil has declined, the company has actually gained share of Cisco's business. Jabil itself denies that it is losing market share. In an email exchange with Blanton, a company executive said: "This is one of those rumors that gets out of hand and keeps growing and being repeated."