Jabil Circuit’s (JBL) results continued to improve in each of the last four quarters. Estimates for the fourth quarter and full-year 2010 have soared following the company’s strong third quarter 2010 results that beat the Zacks Consensus Estimate.
Third quarter 2010 revenues and earnings both jumped on a year-over-year and sequential basis, attributable to a significant operating margin expansion and growth across end markets. Despite substantial European exposure, Jabil provided upbeat fourth quarter guidance, well above the Consensus Estimate. We have raised our 2010 revenue estimate by 6.3% and earnings per share estimate by 15.2%.
We expect Jabil to witness strong revenue, margins and earnings growth by the end of fiscal 2010 and in 2011 on account of new business wins from major OEMs, an increase in customer orders, recovery in end market demand and resurgence in IT enterprise spending. We are upgrading the stock to Outperform and raise our price target to $18.00.