By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- Big losses from Jabil Circuit
Inc. stood out in the tech sector Wednesday in the wake of the
electronics manufacturer giving a negative quarterly report and
outlook and saying its was selling one of its businesses.
Jabil (JBL) shares plunged by almost 22%, to $15.47, after the
company on Tuesday reported a fiscal first-quarter profit that fell
short of Wall Street analysts' estimates, and gave a second-quarter
outlook that also was well off expectations. Jabil also said it
would sell its aftermarket services business, which includes
warranty repairs, to iQor Holdings for $725 million. It's estimated
the business was responsible for about 6% of Jabil's revenue in its
last fiscal year.
Jabil, which makes products for tech giants such as Apple Inc.
(AAPL) and Hewlett-Packard Co. (HPQ), said it's second-quarter
results would be affected by the winding -down of its business with
troubled smartphone maker BlackBerry Inc. (RIMM).
Sean Hannan, an analyst with Needham & Co., cut his rating
on Jabil to hold from buy, saying that in light of the company's
recent announcements and outlook, "We believe Jabil is working
through a much larger transitional period than previously
recognized or was clear" to Wall Street.
Along with Jabil, losses came from Apple, LinkedIn Corp. (LNKD),
H-P and Western Digital Corp. (WDC). The tech-heavy Nasdaq
Composite Index (RIXF) was down by 5 points at 4,018.
Micron Technology Inc. (MU) shares fell more than 7%, to $21.20,
following reports that its main memory-chip rival, Hynix
Semiconductor, plans to build a new factory in South Korea.
Microsoft Corp. (MSFT) shed 1.5%, to trade at $36. On Tuesday,
Microsoft board member John Thompson said the company wouldn't name
a successor to retiring Chief Executive Steve Ballmer until early
in 2014.
Oracle Corp. (ORCL) shares rose nearly 1% ahead of the company's
quarterly results, due after the close of trading.
(RIMM)
Subscribe to WSJ: http://online.wsj.com?mod=djnwires