Earnings Preview for Jabil Circuit

Jabil Circuit (NYSE: JBL) is set to report third-quarter fiscal 2011 results Tuesday, June 21, after the markets close. Analysts are looking for the tech company to report that earnings grew 29.8% from a year ago to $0.57 per share. Sixty days ago, that consensus earnings estimate was the same. The revenue forecast for the quarter calls for $4.1 billion, an increase of 19.9% from the same period of last year.

The Company

St. Petersburg, Florida-based Jabil Circuit is one of the leading providers of electronics manufacturing services in the world. Its largest customers include Apple (NASDAQ: AAPL), Cisco Systems (NASDAQ: CSCO), General Electric (NYSE: GE), IBM (NYSE: IBM), Research In Motion (NASDAQ: RIMM) and Hewlett-Packard (NYSE: HPQ).

In the three months that ended in May, the company added an independent board member and announced a strategic partnership with JA Solar (NASDAQ: JASO).

Looking Ahead

Analysts so far expect to see sequential and year-over-year growth of earnings and revenue from Jabil in the fourth quarter. For the full year, earnings are expected to be up 34.5% to $2.32 per share and revenues up 22.7% to $16.5 billion. Note that earnings results were better than expected in the past nine quarters; the beat was by 6.7% in the previous quarter.

Performance

The long-term earnings per share growth forecast is 10.0%. The trailing P/E ratio is 8.8 and the PEG ratio is 0.8. Jabil has a return on equity of 15.2 and a dividend yield of 1.5%. Analysts on average recommend buying JBL and have for more than 90 days. Their mean price target (a sign of where they expect the share price to go) is currently $25.45.

However, the share price has traded mostly between $19 and $22 since December. Shares closed Friday at $18.29. Yet, year to date, the stock has outperformed its industry average, but underperformed the broader markets.