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Why Jabil Circuit (JBL) Is Gaining In After-Hours Trading

NEW YORK (TheStreet) -- Jabil Circuit (JBL) was gaining 0.8% to $18.40 in after-hours trading Wednesday following a full-year 2015 forecast that's above analysts' estimates, and despite missing analysts' estimates in its fiscal second quarter.

For the fiscal second quarter the company posted a loss of 19 cents a share, missing analysts' estimates of an earnings of 11 cents a share . Revenue fell 18.6% from the year-ago quarter to $3.58 billion. Analysts surveyed by Thomson Reuters expected revenue of $3.59 billion in the quarter.

Looking to the fiscal third quarter Jabil expects revenue of between $3.5 billion and $3.7 billion, while analysts predict $3.6 billion in revenue for the quarter. The company expects a loss of 20 cents a share or breakeven earnings, compared to analysts' estimates of 18 cents a share.

For the full-year fiscal 2015 ending August 2015 Jabil expects earnings of between $1.65 and $1.95 a share, above analysts' estimates of $1.63 a share.

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TheStreet Ratings team rates JABIL CIRCUIT INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate JABIL CIRCUIT INC (JBL) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, notable return on equity and increase in net income. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, a generally disappointing performance in the stock itself and generally higher debt management risk."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • JBL, with its decline in revenue, slightly underperformed the industry average of 2.7%. Since the same quarter one year prior, revenues slightly dropped by 0.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • JBL's debt-to-equity ratio of 0.75 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.48 is very low and demonstrates very weak liquidity.
  • Net operating cash flow has decreased to $117.71 million or 22.51% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • You can view the full analysis from the report here: JBL Ratings Report

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