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Technology Stocks : Jabil Circuit (JBL) -- Ignore unavailable to you. Want to Upgrade?

To: Asymmetric who wrote (5757)	1/21/2001 2:19:43 AM
From: Asymmetric	Read Replies (1) \| Respond to of 6317

Jabil aggressively plots tech expansion Jabil will increase manufacturing capacity and will enter fiber optics and development of high-tech products. sptimes.com By MICHAEL BRAGA © St. Petersburg Times, published January 19, 2001 -------------------------------------------------------------------------------- ST. PETERSBURG -- Other technology companies are hunkering down for an economic slowdown, but Jabil Circuit Inc. intends to almost double manufacturing capacity this year. Jabil, whose assembly line room in St. Petersburg and circuit board work are pictured, will spend $350-million this year on manufacturing equipment and on building and expanding its facilities. -------------------------------------------------------------------------------- The St. Petersburg maker of circuit boards also has created a new Technology Services division to help its customers design and develop high-tech products. And it has created an optics lab, a major step into the fast-growing business of manufacturing products that use light waves to transport voice and data messages over fiber-optic cables. "This is the hottest, highest growth area in telecommunications today," said Jabil chief executive Tim Main. "We expect optics to represent a quarter of Jabil's revenues by 2002." The moves to expand production and services, revealed during the company's annual meeting Wednesday, will require significant investment. But the company expects a payoff in the form of rapid revenue and earnings growth. Main told more than 200 shareholders gathered in the ballroom of the Renaissance Vinoy Resort that Jabil expects to increase revenues by 45 percent this year to $5.2-billion and earnings by 35 percent to $203-million. Those estimates are down from earlier predictions due to the economic downturn, Main said. But they still represent sizable growth. The reason Jabil expects to expand while other technology companies are contracting: Major product manufacturers, such as Dell, Hewlett-Packard, Cisco and Nortel, are easing out of the manufacturing business and outsourcing that activity to contract manufacturers such asJabil. The major manufacturers make about 80 percent of their own products. By 2010, Jabil predicts they will make only 30 percent. Jabil expects to grow by 30 percent a year throughout the decade regardless of where the economy heads. Main said Jabil will spend $350-million this year on manufacturing equipment and on building and expanding its facilities. The company will have more than 25 manufacturing facilities with more than 6-million square feet of space by the end of the year, up from 10 facilities and 5.5-million square feet of space. That doesn't include the 800,000 square feet of space it will occupy after it completes the purchase of five manufacturing facilities from British telecommunications equipmentmaker Marconi Communications later this year. For its new Technology Services division, Jabil also is adding design and development personnel and facilities near its major manufacturing plants around the world. A month ago, Jabil opened its Optics Technology Development Lab in St. Petersburg. It isresponsible for developing manufacturing and testing processes for its customers' optical products. Main said the move represents a significant shift in production for Jabil because the physics of photonics are very different from the digital switch technology the company has worked with. "What we're dealing with is lasers, fiber-optic cable and photons of light," Main said. But the resulting products will do the same thing as some of those the company has made in the past: They will route packets of data from one location to another along fiber-optic cables. Some shareholders at Wednesday's meeting expressed concern that approval for a plan to increase authorized shares from 250-million to 500-million might dilute the company's stock price. But Jabil chief financial officer Chris Lewis assured shareholders the shares will be issued only if there is a stock split or if the company wants to make an acquisition. Jabil's stock closed Wednesday at $37.81, up $4.13. - Contact Michael Braga at braga@sptimes.com or (727) 893-8751