NEW YORK (TheStreet) -- Shares of Jabil Circuit (JBL) fell 22% to $15.30 in trading on Wednesday following an earnings report that missed estimates and after the company announced plans to sell its warranty-repair division.
Jabil posted quarterly earnings on Tuesday of 51 cents a share, below Wall Street estimates of 54 cents. Jabil's sales fell 0.6% for the quarter to $4.6 billion. The electronics company's current quarter doesn't look great, either, as Jabil predicts a decline in sales in two of its three business units.
Along with the earnings report, Jabil announced that it plans to sell its aftermarket services business, which handles warranty repairs, to iQor Holdings for $725 million. The unit was responsible for $1.1 billion in sales in the past year, accounting for about 6% of Jabil's revenue.
TheStreet Ratings team rates JABIL CIRCUIT INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about its recommendation:
"We rate JABIL CIRCUIT INC (JBL) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, attractive valuation levels, growth in earnings per share and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."