I don't know why Wall Street analysts like to give Jabil Circuit
Comments included "signs of margin improvements" and talk about "modest growth" ahead for the circuit-board manufacturer. That's taking CEO Tim Main's word for the company's prospects when he said that he believes "we are on the right path and intend to demonstrate this to our investors over the next several quarters."
You'd also have to ignore the very next paragraph of the report, where the company said it expects virtually flat sales next quarter. And what really raises my hackles is that this mild near-term growth is supposed to launch into some marvelous improvements before the end of the calendar year. From Tim's lips:
In 2007, we expect the instrumentation medical sector to grow 20% over 2006. Computing and storage is also anticipated to grow approximately 18%. Even our after-market services and peripherals sectors will show outstanding growth of about 30% each.
I have to come to the conclusion that management is either knee-deep in wishful thinking, or else in full spin mode -- and the Wall Street guys are listening to the positive parts of this contradictory jumble while turning a deaf ear to the bad news.
I'm sorry, but I don't see how the growth story could play out that way. If you're interested in circuit boards and their assembly, you might do better with Jabil rival Flextronics
TTM Technologies is a Motley Fool Stock Advisor recommendation.