Electronics contract-manufacturer Jabil, Inc. (NYSE: JBL – $27.32) saw higher revenue in its latest quarter and delivered earnings in-line with the target from Wall Street analysts. After adjustments, Jabil reported earnings of $0.57 a share compared to $0.46 in last year’s third period. Sales rose 13% to $6.14 billion, surpassing the $6.01 billion analysts had predicted. The Diversified Manufacturing Services business year-on-year revenue decreased 6% and the Electronics Manufacturing Services segment revenue grew 26%. During the third fiscal quarter, Jabil successfully transitioned additional sites from Johnson & Johnson Medical Devices Companies as part of the previously announced strategic collaboration between the companies. The St. Petersburg, Florida-based company has factories around the world including China, Mexico, the U.S. and Taiwan and counted Apple Inc. as its biggest customer during its most recent fiscal year.
Management believes it will book between $6.3 billion to $6.9 billion in revenue during its fiscal fourth quarter compared to $5.7 billion last year and earn an adjusted profit of $0.76 to $0.96 a share in the period. The revenue guidance is well ahead of Street views of $6.27 billion and earnings straddle the current consensus range. Earnings are targeted at $3.34 per share for next year putting a forward PE ratio on the shares at a reasonable 8.2. I believe the shares – up 2% in after-hours trading and yielding 1.2% – hold strong long-term capital appreciation potential and can be considered for those willing to venture into the cyclical electronics manufacturing industry.