Key point for JBL conference call at the end of June, first data points of manufactured products demand.
Looks like capacity utilization going into the quarter was less than 50 percent due to the Chinese New Year but they were able to control for COVID-19 and still achieve a Q close to consensus.
Weakness going forward expected in automotive due to facilities shut down and weak demand.
Industrial automation in building expected to be weak due to delay in construction builds.
Demand for products at the Edge, networking products high due to stay at home work. Trend expected
to continue into 2021 and beyond.
Semi Equipment demand on track. No cancellation due to Fab builds taking years.
Product packaging demand high due to more people eating at home and demand for cleaning products.
Key update will be in September as they present a more strategic update.
Looks like they saw demand increase in tech offset weakness in automobiles. Looks like increase
in electronics in automobile might slight offset weaker automotive manufacturing demand due to restricted manufacturing and muted end user demand.
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As our teams in China attempted to return from Chinese New Year in mid-February, they were faced with travel lockdowns, quarantines and the need for social distancing. Add to this, the fact that our sites in China were operating at less than 50% capacity.
At the same time, Internet usage was exploding. Prompted by remote learning and video conferencing. Teams from our cloud sector, along with the teams from our mobility and edge device sectors were in full-blown customer care mode, as end users sought digital access to family, friends, business colleagues and patients. A trend likely to be part of the world's new normal.
During the quarter, these areas of strength were offset by weakness in our automotive and transport and print and retail sectors. Nonetheless, our well-diversified commercial portfolio allowed us to deliver $6.3 billion in revenue,
Having said this, and as we sit here today, the impact of COVID will cost us roughly $160 million to $170 million for fiscal year '20. Therefore, we're taking aggressive actions to reshape the organization and ready ourselves for fiscal '21. We'll reduce our workforce, and in return, lower our cost structure by roughly $50 million.
Moving to edge devices and lifestyles. As more people work and learn from home, we're seeing good demand for certain products, such as tablets, headphones and smart watches. In health care, we're experiencing strong demand in the markets, most critical in the fight against COVID-19. Ventilators and ventilators splitters, oxygen and temperature sensing equipment diagnostic systems, including analyzers and test kits, and masks ranging from protective face masks to reusable N95 mask. This trend is being offset by reduced demand for trauma and elective surgery products.
Moving to Packaging. As a reminder, our packaging business is a supplier of the world's leading consumer packaged goods companies. COVID-19 is exerting enormous pressure on our customers to ship unprecedented levels of cleaning and food products. Because of this, we're seeing increasing demand in packaging for laundry products, hard surface cleaners, touchless dispensers and antibacterial wipes.
In addition, we're also seeing good demand for food packaging, spurred on by more people dining at home.
Moving to EMS. Within automotive, our near-term results and outlook have been diminished due to lower forecasted worldwide unit sales and OEM factory closures. However, looking forward, we expect weakness in the traditional automotive markets to be partly offset by additional growth in electrification, which continues to gain overall share of this market.
In semi-cap, we're seeing solid demand driven by the ongoing recovery in this end market as infrastructure spending continues. New fab plant investments are multiyear investments. And so far, customers are marching ahead with their 2020 and 2021 road maps. In wireless and 5G, consistent with prior quarters, we continue to see growth in 5G that is being offset by 4G, as the market transitions to newer technology. In the near term, we expect 5G infrastructure rollouts to continue as network operators upgrade their services.
In cloud, our teams are seeing an increased demand for cloud infrastructure created by stay-at-home orders around the world, which is translating to higher growth. Moving to print and retail, we expect continued pressure in these end markets in the near term, driven mainly by office closures and stay-at-home orders.
Turning now to Industrial and Energy. Demand has been relatively consistent today. But moving forward, we are seeing signs of new building starts being delayed. This could have an impact on future demand.
And then finally, within the enterprise end markets, we are seeing increased demand for networking products due to work from home dynamics, offset by cautious overall enterprise spend. We anticipate this demand dynamic to continue over the next few quarters.
Now turning to our third quarter segment results. Revenue for our DMS segment was $2.4 billion, up 13% year-over-year, while core operating income for the segment increased 27% year-over-year. This resulted in core margins expanding 30 basis points to 2.9%.
Moving to EMS. Revenue for our EMS segment was $3.9 billion, down 2% year-over-year. From an end market perspective, we saw year-over-year strength in the cloud and semi-cap space, offset by declines in automotive, print and retail. Core margins for the segment came in at 2.6%.
Turning now to our fourth quarter guidance that includes approximately $45 million to $55 million in COVID-19 related costs.
DMS segment revenue is expected to increase 1% on a year-over-year basis to $2.5 billion, while the EMS segment revenue is expected to decrease 8% on a year-over-year basis to $3.8 billion. We expect total company revenue in the fourth quarter of fiscal 2020 to be in the range of $5.8 billion to $6.6 billion for a decrease of 5% at the midpoint of the range.
Next, I'd like to outline our updated expectations for revenue in FY '20 by end market. Within DMS, today's revenue outlook is largely unchanged. Our diversification within DMS continues to pay dividends even in the current environment. We expect core margins for DMS to be 3.8% for the fiscal year on revenue of approximately $10.3 billion.
Turning now to EMS. Within EMS, we've reduced our revenue outlook for FY '20, driven by automotive, Industrial and energy and print and retail, which has been partly offset by continued strength in cloud. We expect margins for EMS to be 2.6% on the year on revenue of approximately $15.9 billion.
So in terms of our edge device business, things that -- anything to do with people communicating differently, I think as human beings connection is really, really important. So people are going to want to, whether it's augmented reality, Webex, Microsoft Teams, Zoom, whatever tools people are using, they're going to want to have tools that continue to advance and allow them to have a level of really good human connection. So any device that has to do with that being maybe part of the new normal, I think we saw some upside in that in 3Q. I think we'll continue to see some strength in that in the fourth quarter. And my guess is that strength will carry on through '21 and beyond.
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