Revenue Warning Jolts Jabil Shares
Jabil Circuit (JBL) shares tumbled on Dec. 21, after the St. Petersburg (Fla.) electronic product manufacturing services company posted preliminary revenue results for the quarter ended Nov. 30 and warned of tougher times ahead.
Jabil said its unaudited net revenue for the quarter increased 34% year over year to $3.2 billion. For the next quarter, it expects to see its revenue decline to between $2.75-$2.85 billion. During fiscal year 2007 the company expects to have revenue growth of around 20%.
The company isn't filing full financials as it continues with an investigation of its stock option accounting.
Investors took the news harshly. Jabil Circuit's stock plunged more than 9% to $24.16 per share in late trading on the New York Stock Exchange.
Credit Suisse First Boston downgraded the stock to neutral from outperform on Dec. 21. Analyst Michael Walker noted inventory reductions and weaker demand for products impacted the company's results in the first quarter and its guidance for the second.
Meanwhile execution issues from quarters ago are recovering more slowly than expected, Walker said. The company has managed to report one of its ugliest quarters in memory despite providing only revenue numbers, Walker said.