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The St. Petersburg, Florida-based company posted a third quarter GAAP net loss of $28.8 million or $0.14 per share for the third quarter, compared to net income of $38.4 million or $0.19 per share in the prior year quarter. Result for the quarter under review included restructuring and impairment charges of $12.3 million, and stock-based compensation and related charges of $12.0 million.
Jabil Circuit noted that the GAAP figures for the quarter were preliminary pending the completion of its review of goodwill for potential impairment and resulting deferred tax valuation allowance charges for the quarter.
Excluding items, core earnings dropped to $8.5 million or $0.04 per share from $52.8 million or $0.26 per share in the year-ago quarter. On average, 13 analysts polled by Thomson Reuters expected the company to earn $0.03 per share for the third quarter.
On a GAAP basis, operating loss was $7.8 million for the third quarter, compared to income of $63.1 million in the previous year quarter. Core operating income slipped to $29.0 million or 1.1% of net revenue from $85.3 million or 2.8% of net revenue in the third quarter of fiscal 2008.
Third quarter net revenue declined to $2.6 billion from $3.1 billion in the same quarter of year. Eleven analysts had a consensus revenue estimate of $2.62 billion for the third quarter.
The company had projected a GAAP loss in the range of $0.07 to $0.23 per share, core earnings in the range from a loss of $0.08 per share to profit of $0.08 per share, and net revenue of $2.5 billion to $2.7 billion for the third quarter.
Jabil Circuit said sales cycle was 22 days for the third quarter and annualized inventory turns were eight turns for the quarter.
At the end of the third quarter, the company had more than $750 million in cash and $800 million available under a five-year revolving credit facility, which expires in 2012.
For the nine-month period of fiscal 2009, Jabil Circuit reported a net loss of $1.2 billion or $5.66 per share, compared to net income of $76.4 million or $0.37 per share in the previous year period.
Core earnings decreased to $98.6 million or $0.47 per share from $169.4 million or $0.82 per share in the prior year period.
Net revenue for the year-to-date period declined to $8.9 billion from $9.5 billion in the preceding year.
Looking ahead to the fourth quarter of fiscal 2009, Jabil Circuit anticipates GAAP results between a loss of $0.09 per share and earnings of $0.01 per share, and core earnings of $0.02 to $0.12 per share. Net revenue is expected to be consistent with its third quarter, in a range from $2.5 billion to $2.7 billion. The Street currently expects the company to report earnings of $0.09 per share on revenue of $2.72 billion for the fourth quarter.
The outlook for GAAP earnings is currently estimated to include $0.04 per share for amortization of intangibles, $0.06 per share for stock-based compensation and related charges, and $0.01 per share for restructuring.
Timothy Main, President and CEO of Jabil Circuit, said, "Although the global economy remains in a recession, we see genuine stabilization across most of our end-markets. A stable end-market environment will provide Jabil an opportunity to improve profitability and further strengthen the balance sheet."
Despite cost saving initiatives, Jabil Circuit, like others in the sector, is still feeling the pinch of recession, as consumers cut back on discretionary purchases, and businesses curtail their electronics and IT spending.
Meanwhile, Credit Suisse downgraded Jabil Circuit shares to Neutral from Outperform based on valuation. The brokerage firm said that management's tone throughout the quarter at conferences has been muted, with references to consumer seeming more positive, and networking more negative.
Jabil Circuit shares closed Tuesday's regular trading session at $7.12, up 51 cents or 7.72%, on a volume of 6.73 million shares. However, in the after-hours, the share lost 27 cents or 3.79%. The stock has been moving in a range of $3.10 - $18.78 for the past 52 weeks, with an average daily volume of about 3.22 million shares for the past three months.
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