Jabil Slides After 2Q Earnings Report
By Cindy Christ

Sometimes, good news is no news.

That reversal held true for Jabil Circuit (NYSE:JBL) Friday, as shares in the electronic component maker slid as much as 7.5 percent despite a slew of brokerage upgrades, a record earnings report and 2-for-1 stock split.

After the close Thursday, Jabil reported second-quarter revenues of $837.6 million, up 50 percent from $558.7 million for the same period last year.

Net income improved 52 percent to $33.9 million, or 37 cents per share, versus $22.3 million, or 27 cents per share last year, matching consensus estimates by First Call/Thomson Financial.

Jabil also announced a 2-for-1 stock split payable March 30 for shareholders of record on March 23.

"We are very pleased with the continuing strength of our core business and the performance and contributions of our employees in a challenging growth environment," said Jabil president Tim Main in a statement.

"In support of this growth, we will continue to invest in our core competencies to maintain and improve upon our performance and fundamental manufacturing execution," he added.

According to analysts polled by Zacks Investment Research, Jabil's earnings will grow more than 30 percent annually over the next five years.

This morning, brokerage analysts issued a rash of upgrades on the computer industry contract manufacturer.

Lehman Brothers analyst Louis Miscioscia boosted his 12-month price target to $110 from $90.

Amid strength in new customer programs, Miscioscia also increased his fiscal 2000 earnings per share estimate to $1.58 from $1.56 and 2001 estimate to $2.05 from $2.00.

SG Cowen lifted its 12- to 18-month price target on Jabil to $122 from $115, and upped 2000 and 2001 earnings estimates to $1.58 from $1.56 and to $2.07 from $2.00.

Credit Suisse First Boston raised its price target to $95 from $82, noting new project wins from current customers which include Cisco Systems (NASDAQ:CSCO), Hewlett-Packard (NYSE:HWP), Dell Computer (NASDAQ:DELL) and Gateway Inc. (NYSE:GTW).

Bear Stearns analyst Thomas Hopkins reiterated his "buy" rating and set a $110 price target. Hopkins projects Jabil earnings of $1.62 per share this year and $2.23 in 2001.

Analysts from Deutsche Banc Alex. Brown, Banc of America, Robertson Stephens and US Bancorp Piper Jaffray also raised price targets and reiterated "buy" ratings on shares of Jabil.

Although it wasn't enough to keep shares in positive territory, Lehman's Miscioscia wasn't phased by the dip.

"The actual up and down tick is a little on the ridiculous side," said Miscioscia in an interview with SplitTrader.com, referring to Jabil's trading range since posting earnings Thursday.

"A lot of the volatility is just noise. The company posted a solid quarter and the business trend looks good. You have to compare it to the rest of tech and what it's doing," he said.

Jabil shares finished down $4.13, or 4.8 percent, at $81.88.