Jabil Circuit Falls Amid Market Pullback Despite Q4 Earnings Beat

NEW YORK (TheStreet) -- Shares of electronic manufacturing services and solutions supplier Jabil Circuit (JBL) are falling despite the company having reported fourth quarter earnings and fiscal year 2015 guidance that surpassed analysts' consensus.

WHAT'S NEW: Jabil's Q4 core EPS was 5c, which beat analysts' consensus of 0c. The company's Q4 revenue of $4.1B also beat analysts' consensus view of $3.83B. The company reaffirmed its FY15 core EPS view of $1.65-$1.95, which compares to consensus of $1.74. Jabil sees Q1 core EPS between 41c-53c, compared to analysts' 41c consensus view prior to the report. It expects Q1 revenue in the range of $4.2B-$4.4B, which is above analysts' prior consensus of $4.11B. Jabil said that it expects FY15 revenue between $16.5B-$18.0B, while analysts were predicting revenue to be $16.35B.

WHAT'S NOTABLE: On the company's conference call, Jabil said that it is targeting FY15 growth of 0%-5% for its Electronics Manufacturing Services segment and margins of 2%-4%. Its aiming for FY15 growth of 8%-10% for its diversified manufacturing services segment and margins of 5%-7%. The company anticipates making "substantial investments" in FY15. Jabil noted that its exploring new, "non-traditional markets" and sees strong operating cash flows going forward.

ANALYST REACTION: Bank of America Merrill Lynch analyst Wamsi Mohan said that heading into November, he feels that there is proof that Apple's (AAPL) business is finally transitioning to a tailwind for Jabil. He believes that Jabil should maintain revenue and earnings this cycle over the next few quarters. Mohan maintains the stock with a Buy rating. UBS analyst Amitabh Passi feels that Jabil is "on track" to stabilizing its performance. He feels that the company's Q1 guidance was imperative to assuring its FY15 EPS view. Passi said that strong programs with Apple along with improved utilization and fixed cost absorption is aiding in normalizing trends after a hard FY14. Passi also kept his Buy rating on shares of Jabil.

PRICE ACTION: During morning trading, Jabil fell 56c, or 2.5%, to $21.60. The drop comes amid a pullback in the broader market, as the Dow Jones Industrial Average, the S&P 500 and the Nasdaq are all down by over 1% as well.

OTHERS TO WATCH: Other providers of electronics manufacturing services include Sanmina (SANM) , Celestica (CLS) , Benchmark Electronics (BHE) and Flextronics (FLEX) .

Reporting by Gina Gioldassis.

The Fly provides comprehensive coverage of stock news and Street research and delivers it in real-time. The Fly breaks market-moving news and explains sudden stock movements in a rapid-fire, short-form story format. Follow @theflynews on Twitter. For a free trial, click here.

If you liked this article you might like

Why President Trump Pulling Out of Nafta Won't Crush U.S. Economy: Goldman Sachs

Why President Trump Pulling Out of Nafta Won't Crush U.S. Economy: Goldman Sachs

Verizon and Facebook Spending Plans Give Strong Clues to Tech Earnings

Verizon and Facebook Spending Plans Give Strong Clues to Tech Earnings

The Big Implications of Verizon and Facebook's Very Different Spending Plans

The Big Implications of Verizon and Facebook's Very Different Spending Plans

Would Love to Hear What Mario Draghi Says About Bitcoin

Would Love to Hear What Mario Draghi Says About Bitcoin

Disney, Fox and Net Neutrality - 5 Things You Must Know Before the Market Opens

Disney, Fox and Net Neutrality - 5 Things You Must Know Before the Market Opens