Contract manufacturer Jabil on Thursday beat Wall Street targets for its fiscal third quarter thanks to strong electronics business. It also guided higher for the current quarter and full fiscal year. But JBL stock fell as the broader market retreated.
The St. Petersburg, Fla.-based company earned an adjusted $1.72 a share on sales of $8.33 billion in the quarter ended May 31. Analysts polled by FactSet expected Jabil earnings of $1.62 a share on sales of $8.22 billion. On a year-over-year basis, Jabil earnings increased 32% while sales advanced 15%.
For the current quarter, Jabil forecast adjusted earnings of $2.14 a share on sales of $8.4 billion. That's based on the midpoint of its guidance. Wall Street was modeling earnings of $2.01 a share on sales of $8.27 billion.
"As we look ahead, we see solid demand in key areas of our business," Chief Executive Mark Mondello said in a news release. "Given this ongoing momentum, we now expect FY22 revenue to be in the neighborhood of $32.8 billion and core EPS to be $7.45."
Analysts had been targeting earnings per share of $7.23 on sales of $32.7 billion for fiscal year 2022.
JBL Stock In Consolidation Period
On the stock market today, JBL stock sank 9.9% to 53.02 as the major indexes tumbled.
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 the third quarter, Jabil's electronics manufacturing business posted a 23% increase in revenue. Its diversified manufacturing business saw sales rise 7% year over year.
JBL stock is in a 24-week consolidation pattern with a buy point of 72.21, according to IBD MarketSmith charts. But it could offer an early entry at 63.48 if it clears a shorter base. But with the market in correction, investors should not take new positions in stocks, based on IBD trading guidelines.
JBL stock ranks third out of 15 stocks in IBD's electronics contract manufacturing industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 94 out of 99. The Composite Rating scores a stock's key growth metrics against all other stocks regardless of industry group.
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