Dec 17 Contract electronics maker Jabil Circuit
Inc said it would sell its warranty repair business in a
deal valued at $725 million, as it focuses on its manufacturing
The company, whose customers include Apple Inc and
Cisco Systems Inc, also forecast current-quarter
results way below Wall Street estimates.
Jabil's shares fell 14 percent in extended trading.
The company will sell the warranty repair business, also
known as aftermarket services, to U.S.-based business process
services company iQor Holdings Inc.
The business accounted for about 6 percent of Jabil's total
revenue of $18.3 billion last year.
Jabil said JP Morgan was the financial adviser and Holland &
Knight LLP its legal counsel for the deal, which is expected to
close in the third quarter.
Jabil forecast second-quarter core earnings of 5-15 cents
per share on revenue of $3.5-$3.7 billion.
Analysts were expecting earnings of 52 cents per share on
revenue of $4.28 billion, according to Thomson Reuters I/B/E/S.
The company expects revenue to fall 25 percent in its
diversified manufacturing services and high velocity businesses.
The two businesses accounted for 70 percent of Jabil's total
revenue last year. The high velocity business designs and
markets products for devices and gadgets such as mobiles,
set-top boxes and printers.
The company attributed the expected second-quarter revenue
decline in the high velocity business to the winding down of its
business with BlackBerry . Jabil said in
September it could part ways with BlackBerry, its second-largest
customer last year.
Jabil's shares were down at $17.02 after the bell. They
closed at $19.72 on the New York Stock Exchange on Tuesday.
The company said net income attributable to the company rose
to $117.9 million, or 57 cents per share, in the first quarter,
from $105.8 million, or 51 cents per share, a year earlier.
Revenue fell marginally to $4.61 billion.
Analysts had expected earnings of 54 cents per share on
revenue of $4.46 billion.