EyeCatching Stock: Jabil Circuit Inc. (NYSE:JBL)

Jabil Circuit Inc. (NYSE:JBL) reported earnings for the three months ended May 2016 on June 15, 2016. The company earned $0.17 per share on revenue of $4.31B. Analysts had been modeling earning per share of $0.16 with $4.18B in revenue.

Jabil Circuit Inc. (NYSE:JBL) reported preliminary, unaudited financial results for its third quarter of fiscal year 2016, including third quarter net revenue of $4.3 billion.

U.S. GAAP operating income for the third quarter was $59.6 million and U.S. GAAP net diluted earnings per share was $0.03. Core operating income (as defined below) was $87.2 million and core diluted earnings per share (as defined below) was $0.17.

(U.S. GAAP net diluted earnings per share for the fourth quarter of fiscal year 2016 are currently estimated to include $0.05 per share for amortization of intangibles, $0.09 per share for stock-based compensation expense and related charges and $0.03 to $0.02 per share for restructuring and related charges.)

Management updated the fiscal year 2016 revenue outlook to approximately $18.2 billion; U.S. GAAP net diluted earnings per share outlook to approximately $1.20 and core diluted earnings per share outlook to approximately $1.85.

Capital Allocation Outlook

As part of a framework to increase capital returns to shareholders over the next two fiscal years, Jabil’s Board of Directors authorized a $400 million share repurchase program. The overarching capital allocation framework is designed to return approximately 40% of cash flows from operations through dividends and share repurchases over the next two years, not to exceed $1 billion in total.

“This framework announced today reflects our confidence in our ability to generate in excess of $2 billion of cash flows from operations over the next two fiscal years,” said CFO Forbes I.J. Alexander. “Moving ahead, we remain confident in our ability to effectively leverage our asset base, maintain relationships with both new and existing customers and grow earnings per share,” he added.

Definitions: “U.S. GAAP” means U.S. generally accepted accounting principles. Jabil defines core operating income as U.S. GAAP operating income before amortization of intangibles, stock-based compensation expense and related charges, restructuring and related charges, distressed customer charges, acquisition costs and certain purchase accounting adjustments, loss on disposal of subsidiaries, settlement of receivables and related charges, impairment of notes receivable and related charges and goodwill impairment charges. Jabil defines core earnings as U.S. GAAP net income before amortization of intangibles, stock-based compensation expense and related charges, restructuring and related charges, distressed customer charges, acquisition costs and certain purchase accounting adjustments, loss on disposal of subsidiaries, settlement of receivables and related charges, impairment of notes receivable and related charges, goodwill impairment charges, income (loss) from discontinued operations, gain (loss) on sale of discontinued operations and certain other expenses, net of tax and certain deferred tax valuation allowance charges. Jabil defines core diluted earnings per share as core earnings divided by the weighted average number of outstanding diluted shares as determined under U.S. GAAP.

Jabil Circuit Inc. earnings per share showed a decreasing trend of -11.6% for the current fiscal year. The company’s expected EPS growth rate for next fiscal year is 206%.Analysts project EPS growth over the next 5 years at 12%. It has EPS annual growth over the past 5 fiscal years of 14% when sales grew 5.9. It reported -1.1% sales drop, and -92.6% EPS decline in the last quarter.

The stock is trading at $19.9, up 19.18% from 52-week low of $16.78. The stock trades down -22.79% from its peak of $26 and % below the consensus price target of $20.5. Its volume clocked up at 3.38 million shares which is higher than the average volume of 2.53 million shares. Its market capitalization currently stands at $3.69B.

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