Other EMS Stocks Holding Up Better Than Jabil (JBL, BHE, CLS, FLEX, PLXS, SANM)

Jabil Circuit Inc. (NYSE: JBL) is one of the big losers today as sharesa are down and out due to missed earnings and forecasts.  This is a new 52-week low.  The electonic manufacturing services company posted quarter losses of $24 million last, compared to profits of $13.9 million this quarter last year. The losses were due to restructuring and impairment charges reaching $41 million.  EPS were -$0.12 on $3.1 billion in sales, compared to $0.07 EPS a year ago. Without the one-time charges, the company would have had $0.20 EPS. Thomson Financial analysts estimated an average of $0.18 EPS on $3.05 billion in sales, although one-time charges were excluded. The company also stated that third quarter results will undershoot analyst projections.

Downgrades by Deutsche, JPMorgan, and Thomas Weisel have not softened the blow.  In mid-day trading, the stock is down by $1.77 per share, over 15%, to $9.61 compared to a high of $25.80.  This also has the other electronic manufacturing service players faring not so well today, although it interestingly enough isn’t hurting them nearly as much as Jabil took heat.  You will see with notes below:

• Benchmark Electronics (NYSE: BHE) is also down today by over 5% to $18.49. The 52-week range is $14.90 to $27.01.
• Celestica Inc. (NYSE: CLS) is down almost 6% today to $6.40, although only $1.00 away from its 52-week high of $7.35.
• Flextronics International (NASDAQ: FLEX) is down by $0.45, 4%, to $9.71 today, only $0.65 from its 52 week low reached January 23. The 52-week high sits at a far $13.60.
• Plexus Corp. (NASDAQ: PLXS) isn’t down by as much compared to the others. The stock is down only 2% today to $27.53, still very far from its 52-week low and high of $16.62 to $32.47, respectively.
• Sanmina-SCI Corp. (NASDAQ: SANM) also down by 5% today to $1.71. The 52-week range is $1.15 to $3.88.

What is interesting about these is that Jabil has been by far the worst one of the group by far, although Sanmina-SCI has been in a turnaround that has taken longer than most should be happy with.  Many of the others have been down and out as well as an overall spending climate is probably slowing more orders.  The good news is that many are diversifying away from being pure technology outsourced manufacturers to more broad-based outsourced manufacturing companies.  The bad news is that the slowdown isn’t just limited to tech.  If Jabil’s trend is systematic rather than symptomatic, then the others in the group  might see more pressure after today.

Jon C. Ogg
March 26, 2008

Jon Ogg produces the Special Situation Investing Newsletter and can be reached at [email protected]; he does not own securities in the companies he covers