Strong PC sales power Jabil profit
The St. Petersburg maker of computer components reported a 7 percent increase in quarterly earnings.
By AMEET SACHDEV
© St. Petersburg Times, published March 17, 1999
ST. PETERSBURG -- Jabil Circuit Inc. says strong sales of personal computers and Internet hardware drove up fiscal
second-quarter earnings by 7 percent.
Jabil, one of the world's largest contract electronics
manufacturers, reported net income of $21.6-million, or 28
cents a diluted share, for the period ended Feb. 28, compared
with $20.1-million, or 26 cents a share, a year earlier. The
per-share figures reflect a 2-for-1 stock split Feb. 5.
Earnings beat analysts' forecasts by a penny, according to First
Call Corp. Jabil released its results after the markets closed,
but investors seemed to anticipate the better-than-expected
earnings. Jabil's shares hit a 52-week high of $41.871/2 during
trading Tuesday before closing at $41.25, up $1.811/4.
Revenues at the St. Petersburg company surged 49 percent to
$493.4-million from $330.7-million a year earlier. Much of the
increase was because of the acquisition last year of laser
printer assets from Hewlett-Packard Co.
Still, Jabil continues to experience rapid growth in
computer-networking equipment for the Internet. Jabil makes
circuit boards and other components for companies such as
Cisco Systems Inc. and 3Com Corp. The company anticipates
that data communications will make up nearly half of its
revenues in the current fiscal year. Analysts expect Jabil's
revenues to reach $2.1-billion in fiscal 1999.
The next big opportunity will be in telephone-switching
equipment, and Jabil is in a good position to win business in
this market, said Tom Sansone, the company's vice chairman.
Jabil just completed a secondary stock offering that raised
nearly $200-million. About $80-million of the proceeds will be
used to pay off outstanding debt. With $100-million left over in
cash, Jabil is girding itself for new contracts expected in the
coming months, analyst say.
"We've got the ammunition if good targets come up," Sansone
said. The company will almost double the size of its factory in
Mexico by May. The facility already employs 1,300 people.
Jabil just started production in a new factory in San Jose,
Calif., and bought 50 acres in Boise, Idaho, for a
175,000-square-foot plant.
Jabil also is considering expansion in St. Petersburg. When
construction of its new corporate headquarters is completed
this fall, the company will have built out its campus off
Roosevelt Boulevard.
Sansone said the company is looking for additional space for
product assembly. One possibility under discussion is leasing
space at a new business park at Gandy Boulevard and
Interstate 275.
The growth is attracting a lot of attention on Wall Street.
Analysts from U.S. Bancorp Piper Jaffray and Thomas Weisel
Partners just started coverage of the company. About 25
analysts now follow the company. |
