On June 21, electronics manufacturer Jabil Circuit (NYSE:JBL) released third-quarter earnings for the period ended May 31.

  • Gosh, what happened to the profits? A $25 million restructuring charge didn't help any, and neither did $47 million higher selling, general, and administrative expenses. That's 50.4% higher SG&A costs funded by a 15.8% sales increase.
  • But the stock is up more than 10% today, so this is a good report, right? Well, maybe if your expectations were diving for deep-sea pearls. Non-GAAP earnings of $0.23 per share fell at the low end of management's guidance, and that's after backing out such inconvenient items as stock-based compensation (who needs it?), restructuring (one time only, honest!), and amortization of intangibles (intangibles -- you can't even see them!). Just keep in mind that Jabil's gain came off a three-year low, and that the share price is still down 45% from 14 months ago.
  • $926 million of the long-term debt is in current installments. Most of that is a bridge loan that management hopes to replace with a more permanent financing vehicle very soon.

(Figures in millions, except per-share data)

Income Statement Highlights

Q3 2007

Q3 2006

Change

Sales

$3,002

$2,592

15.8%

Net Profit

$6.2

$64.2

(90.3%)

EPS

$0.03

$0.30

(90.0%)

Diluted Shares

205.8

215.8

(4.7%)

Get back to basics with the income statement.

Margin Checkup

Q3 2007

Q3 2006

Change*

Gross Margin

7.3%

7.2%

0.1

Operating Margin

1.1%

3.0%

(1.9)

Net Margin

0.2%

2.5%

(2.3)
*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q3 2007

Q3 2006

Change

Cash + ST Invest.

$558

$855

(34.7%)

Accounts Rec.

$1,337

$1,139

17.3%

Inventory

$1,447

$1,230

17.6%

Liabilities

Q3 2007

Q3 2006

Change

Accounts Payable

$1,890

$1,791

5.5%

Long-Term Debt*

$1,324

$356

271.7%
*Including current portion

The balance sheet reflects the company's health.

Cash Flow Highlights

Free cash flow is a Fool's best friend. Sorry, but our pal can't come out and play today.

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, Fool contributor Anders Bylund had no position in any company mentioned. Fool rules are here.