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

To: Toby Zidle who wrote (4794)	12/17/1998 7:49:00 PM
From: Jeff Haas	Respond to of 6317

Article From St. Petersburg Times 10077 of 10077 Jabil beats analysts' estimates Jabil's healthy earnings are part of a three-month run in which its shares have tripled in value. By AMEET SACHDEV © St. Petersburg Times, published December 16, 1998 ST. PETERSBURG -- Jabil Circuit Inc. topped analysts' expectations for the fiscal first quarter, propelled by a growing outsourcing trend among brand-name electronics manufacturers. Jabil's growth prospects are pushing the circuit board manufacturer to expand its St. Petersburg campus. The company broke ground on a 60,000-square-foot corporate headquarters building last week. Jabil said net income increased to $19.3-million, or 50 cents a diluted share, for the three months ended Nov. 30, from $19.1-million, or 49 cents a share, a year earlier. Analysts had expected Jabil to earn 43 cents a share, according to a survey by First Call Corp. The earnings were released after the New York Stock Exchange closed. But during trading Tuesday, Jabil's stock hit a 52-week high of $70 before closing at $69.50, up $7.50. The 12 percent increase in share price was fueled by Monday's encouraging earnings report from Solectron Corp., a Jabil competitor in Milpitas, Calif. Solectron, the world's largest contract electronics manufacturer, posted a 42 percent increase in net income and beat analysts' expectations by 2 cents a share. Jabil's stock performance on Tuesday is part of a three-month run that has seen its shares triple in value. On Sept. 1, Jabil was trading at $23, as worries about Asia's economic crisis dampened the outlook for technology stocks. Since then, Jabil has been buoyed by an overall market resurgence as well as reports that demand for contract electronics manufacturing will be strong in 1999. Analyst William Cage of J.C. Bradford & Co. in Nashville, Tenn., predicts that industry growth will continue at about 25 percent a year as more companies shift manufacturing to companies such as Jabil and Solectron. During the first quarter, Jabil added new business from Nortel Networks Inc., formerly known as Bay Networks, and Network Appliance Inc., which makes computers servers for the Internet and corporate networks. Some companies are even selling their factories to contract electronics manufacturers. This year, Jabil bought Hewlett-Packard Co.'s laser-printing manufacturing assets, the first acquisition in years for the conservative company. The purchase spurred a 40 percent increase in Jabil's revenues to $448-million from $320-million a year ago and also contributed to earnings in the first full quarter of production. "The HP integration seems to be going very well," said Steve Jun, an analyst with William R. Hough & Co. in St. Petersburg. It is going so well that Jabil has agreed to purchase a 50-acre campus in Boise, Idaho, to build its own plant for the HP operations. The company currently leases space from HP in Boise and Bergamo,Italy. Although the HP acquisition has been a success, don't expect Jabil to go on a deal-making spree. "Although the number of opportunities continue to mushroom, we can be expected to be very conservative on the acquisition front," Jabil president Tom Sansone said. Revenues grew more rapidly than earnings because of costs from the start-up of a factory in San Jose, Calif. The new HP operations also include a higher mix of purchased components, which can distort revenues, Sansone said. Jabil added 600 employees with the HP deal and now has 5,311 full-time employees worldwide, an increase from 3,661 in August 1997. As it grows, Jabil needs more office space. The new headquarters building in St. Petersburg, which will house corporate staff, design engineers and information technology personnel, is expected to be completed by fall 1999. Jabil plans to beef up its corporate staff by as many as 30 people in the next year, Sansone said.