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Jabil Circuit hammered on 4Q outlook, downgrades

Jabil Circuit Inc. (NYSE: JBL) plummeted 7 7/8, or 15 percent, to 46 1/8 Wednesday, one day after it met analysts' estimates in its third quarter but warned that fourth-quarter sales and earnings would be about 10 percent lower than current estimates.

In the quarter, the circuit board assembly maker earned $24.4 million, or 29 cents a share, on sales of $522.5 million, matching the First Call consensus estimate for the quarter.

But last-minute design delays on new products from two customers means the company will post sales and earnings-per-share roughly 10 percent lower than current analysts' estimates.

"The impact of these potential deferments could reduce expected fiscal fourth quarter revenue and earnings per share by as much as 10 percent from prior expectations," the company said in a release. "It is anticipated that any growth delays on these new products would be recovered in the fall."

On Wednesday, Merrill Lynch cut the stock to "near-term neutral" from "near-term accumulate" while Robinson Humphrey slashed it from a "near-term buy" rating to "long-term" hold.

Morgan Stanley Dean Witter analyst Shelby Fleck cut its fourth-quarter earnings estimate from 32 cents a share to 29 cents a share but reiterated her "outperform" recommendation.

Interestingly, C.E. Unterberg Towbin raised Jabil Circuit from a "buy" to "strong buy" recommendation.

The $522.5 million in sales represents a 69 percent improvement versus the year-ago period when it raked in $17.3 million, or 23 cents a share, on sales of $309.6 million.

Last quarter, Jabil shattered analysts' estimates, earning $21.6 million, or 28 cents a share, on sales of $493.3 million.

After splitting 2-for-1 in February, the stock surged to a 52-week high of 54 3/16 earlier this week. The stock hit a low of 11 1/2 in August.

First Call consensus expects Jabil to earn $1.15 a share in the fiscal year.

Twenty-one of the 26 analysts following the stock maintain either a "buy" or "strong buy" recommendation.