Tuesday, June 13, 2006

Bear Stearns comments on Jabil (NYSE:JBL)

Jabil Circuit (NYSE:JBL) warned late last night. So far, Bear Stearns has the best comments:

Firm calls the news a big surprise but thinks it's important to note that JBL's miss did not impact the top-line. In dollars this miss equates to ~$17M on the bottom line which is material, but certainly not enough to throw in the towel.

In firm's group, JBL stands out for its flawless execution and tight operational controls, so they were both shocked and chagrined to see its qtr impacted by "operational issues". Firm finds is concerning that while JBL's release states that it's optimistic about the future and that revs continue to show strong growth, why did it choose not to quantify this more given the qtr ended 2 weeks ago? They believe giving Aug qtr guidance would have gone a long way towards quantifying the future impact and that its omission implies that the "operational issues" could impact the Aug qtr. They are not changing ests yet, nor are they throwing in the towel. JBL looks off $1+ today making its valuation even more compelling. Maintains Outperform and $50 tgt.

Notablecalls: Buying JBL below $30 level will most likely work.

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