Some thoughts on Jabil
(And you thought I'd never get around to it <ggg>).
To add to your post, my understanding is the new program
wins that Jabil has picked up recently are estimated to
eventually bring in as much as $500 million in new annual
revenue. However, understandably due to uncertain economic
conditions, when and how fast these programs ramp up is not
certain. The incredibly poor financial shape Marconi is in,
along with the recent executive upheaval and resignation of
two top officers, does not bode for much in the way of
business from there...and added to the terrible shape of
the telecomm/networking area, any prospective ramp-up of
business will continue to be disappointing over the near
term from Marconi, IMHO. When the Financial Times runs an
article telling senior executives at Marconi to come clean
with shareholders,(about how poor a condition the company
and it's business are really) what do you think the chances
are they've been honest/truthful with Jabil management
regarding the amount of business they'll be sending Jabil's
way?
The loss of Dell's laptop business to two Taiwanese contract
manufacturers will definitely hurt, as right now everyone
is fighting to hang onto what business they've got and this
was a significant portion of Jabil's revenue overall.
The merger of H-P and Compaq throws another curve ball at
Jabil, as H-P, a large Jabil customer, has announced,
concurrently a desire to consolidate down their number of
contract manufacturers. While this could/should actually
end up throwing MORE business Jabil's way, the market has
to price in uncertainty and hedge their bet that it could
possibly mean less business as well. Then of course if
the HWP-CPQ precipitates further mergers, that ends up
changing the entire playing field for everybody.
Then the announcement by Sanmina of a significant revenues &
earnings shortfall last week was like detonating a bomb in
a crowded cafe of mutual fund and institutional managers.
And when they get to running around panicked and scared,
guys like me who are there to drink the house brand coffee
(never mind the latte or the expresso!) and pick up a few
crumbs to eat from the floor get run over pretty fast.
To end I'll include a little story/blurb on the present CEO
I found in the St Petersburg Times that was amusing:
"As today's teenagers prepare for summer break, local
executives recalled the sweat, low pay and long-lasting
impact of their most memorable summer jobs.
Timothy Main, president and chief executive Jabil Circuit
Inc., St. Petersburg
Tim Main was pedaling his bike frantically down a Kentucky
road, dodging shotgun pellets, when he realized there was
an easier way to make a living than selling Bibles and
other books door to door.
"It occurred to me that I should probably buckle down at
school," said Main, who eventually graduated from Michigan
State University with a major in economics and East Asian
Studies. "I could see what life without education would be
like."
Despite being peppered with gunshot and bitten by dogs,
Main, 43, doesn't regret the summer in 1978 when he carried
a blue sample box on the back of his bike through the hills
of Tennessee, Kentucky and southern Illinois.
Sharing an apartment with three fellow book-hawkers, Main
knocked on doors six days a week, 12 hours a day. A
reference dictionary was $45.90; a layman's Bible, $24.95;
a series of five children's book was a tough sell at $107.
In his best week, Main sold $1,500 worth of books. By the
end of summer, he had earned $1,000 despite frequent
rejection.
"The plan was you had to do 30 calls to get three sales,
and that's pretty much the way it worked out," he
said. "The hit rate is a little higher here at Jabil." |
