Contract manufacturer Jabil on Wednesday beat Wall Street's targets for its fiscal second quarter thanks to surging electronics business. It also offered higher forecasts for the current quarter and full year. JBL stock jumped on the news.
The St. Petersburg, Fla.-based company earned an adjusted $1.68 a share on sales of $7.55 billion in the quarter ended Feb. 28. Wall Street had predicted Jabil earnings of $1.47 a share on sales of $7.43 billion, according to FactSet. On a year-over-year basis, Jabil earnings rose 32% while sales increased 11%.
For the current quarter, Jabil sees earnings of $1.60 a share on sales of $8.2 billion. That's based on the midpoint of its outlook. Its forecast would translate to year-over-year growth of 23% in earnings and 14% in revenue. Analysts had been looking for earnings of $1.46 a share on sales of $7.71 billion in the fiscal third quarter, FactSet said.
Plus, Jabil raised its forecast for the full fiscal year. It now expects to earn an adjusted $7.25 a share on sales of $32.6 billion. Wall Street was projecting earnings of $6.62 a share on sales of $31.8 billion.
JBL Stock Jumps On Earnings Report
On the stock market today, JBL stock popped 9.7% higher to close at 61.21. JBL stock notched its all-time high of 72.11 on Dec. 29, before the stock market correction.
"I like what we're doing and where we're going," Chief Executive Mark Mondello said in a news release. "Our strong financial outlook is supported by both strong secular tailwinds and momentum in many of the end-markets we serve."
Jabil has two business segments: electronics manufacturing services and diversified manufacturing services. The electronics manufacturing unit makes gear for 5G wireless, cloud computing, networking, storage, industrial and other applications. The diversified manufacturing unit makes automotive, health care, mobile and other devices.
In its second quarter, Jabil's electronics manufacturing sales rose 19% year over year while diversified manufacturing sales climbed 4%.
JBL stock ranks third out of 14 stocks in IBD's Electronics-Contract Manufacturing industry group, according to IBD Stock Checkup. But it has a so-so IBD Composite Rating of 70 out of 99. Also, its group ranks No. 139 out of 197 industry groups that IBD tracks. IBD trading guidelines recommend focusing on top-rated stocks in leading industry groups.
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