Contract manufacturing services company Jabil, Inc. (NYSE: JBL – $27.37) reported fiscal fourth-quarter profit and sales that beat expectations. Excluding special items, for the quarter ended August, earnings per share came to $0.70 compared to $0.64 last year and above the consensus estimate of $0.68. Revenue rose to $5.77 billion from $5.02 billion, beating Street expectations of $5.41 billion. For the full fiscal year, net revenue totaled $22.1 billion vs. $19.1 billion in fiscal 2017 with a 23% growth in the company’s Diversified Manufacturing Services unit and an 11% increase for the Electronics Manufacturing Services segment. Total twelve-months earnings per share ended at $2.62 vs. $2.11 a year ago.
For the first quarter of fiscal 2019, the company expects adjusted earnings of $0.79 cents to $0.99 surrounding the consensus of $0.88 and revenue of $5.8 billion to $6.4 billion, compared with expectations of $5.9 billion. Despite the strong showing and upbeat guidance, traders were apparently expecting more from Jabil, sending the stock down about 9% in early trading. Longer-term, aggressive accounts may want to take a look at JBL at current levels. The St. Petersburg, Florida-based company is successfully diversifying away from reliance on its large customer Apple and is generating rising revenue and income in its core electronics manufacturing operations. Logistics headwinds from a shortage of electronic parts will probably improve early next year, as well. Share buybacks and solid organic growth should lift share net earnings higher over the next few years. The equity is inexpensively valued at 10.8 times estimated fiscal 2019 earnings and offers above average long-term appreciation potential in my view.