Jabil ends fiscal year in a slump
sptimes.com
Net income tumbles in the fourth quarter due to weakened demand, but the company's outlook remains positive.
By KRIS HUNDLEY
© St. Petersburg Times, published September 21, 2001
ST. PETERSBURG -- Despite a 76 percent drop in earnings in the last quarter and continued weakness in general demand for circuit boards, Jabil Circuit Inc. said it will be looking for acquisitions and expects its business to stabilize in the coming year.
Jabil, which makes electronic components for companies such as Cisco, Dell and Hewlett-Packard, reported quarterly and year-end results after the market's close Thursday.
In the fourth quarter ended Aug. 30, the company had revenues of $944-million, down from $1.1-billion a year ago. Net income for the three months was $11.2-million, compared with $47.1-million a year earlier. Earnings per share were 6 cents, down from 24 cents a year prior.
Excluding non-recurring charges tied to the previously announced acquisition of some manufacturing plants from Marconi Communications, as well as restructuring charges, the company had earnings of 13 cents per share, nearly matching consensus estimates of analysts of 14 cents per share.
For the year, Jabil reported sales of $4.3-billion, compared to $3.6-billion in fiscal 2000. Net income and earnings per share for the year were $118.5-million and 59 cents, down from $145.7-million and 78 cents a year ago.
Jabil's stock closed Thursday at $15 a share, down 63 percent from a 52-week high of $40.99 on Feb. 1.
During a post-market conference call, Jabil executives said they didn't expect last week's terrorist attacks in New York City and Washington, D.C., to have a significant impact on its business.
"In the short-term, there may be a negative impact if it delays end-market recovery," said Tim Main, Jabil's president and chief executive. "But the short-term logistical impact is minimal. The supply lines are open again."
While Main described the just-ended fiscal year as "clearly challenging," he said the company reduced inventory in the last quarter by $99-million and improved inventory turns.
As part of its restructuring, the company also laid off an undisclosed number of workers and closed a plant in Massachusetts. A year ago, Jabil had about 3,000 workers at its facilities in St. Petersburg; it has repeatedly declined to provide updated information about its local employment.
"We believe Jabil's position in the EMS (electronic manufacturing services) industry continues to be very strong despite current market conditions," Main said. "We are gaining share with our top customers as many of them move to reduce their total number of suppliers, and we are winning production opportunities with new customers."
Jabil said it has been selected by Agilent Technologies to be a principal worldwide supplier; won a new set-top box program with Hughes; and has signed a three-year manufacturing agreement with Intel, which will become one of Jabil's top 10 customers as a result.
As part of that agreement, Jabil will purchase an Intel plant in Panang, Malaysia, adding about 900 people.
Despite Main's cautious optimism, he said Jabil expects revenues for the quarter ending in November to be flat to slightly down, at $900-million to $950-million. Earnings for the first quarter, excluding one-time charges, are projected to be 11 cents to 13 cents per share.
"In the first quarter of 2002, we'll still be absorbing a steep oversupply, but we'll be replacing our PC business with new customer wins and seeing modest acquisition growth," Main said. "We expect a more level environment than during our last (conference) call due to continuing wins in new programs."
- Kris Hundley can be reached at hundley@sptimes.com or (727)892-2996. |
