Message Font: Serif | Sans-Serif
No. of Recommendations: 0
A lot of good comments about Jabil and it would be a great place for someone to BEGIN their career. This is late; but JBL stock is down again because there is not enough 'new' business to compensate for the reduction in business that has taken place. The Industry is still waiting for more business from it's customers and Avaya (Jabil customer) signed a large contract with a Jabil competitor, Celestica.

LTX new business is a feather in the cap for Jabil as LTX has a difficult and complex product with very exacting requirements. LTX sells to companies building Electronics requiring exact frequency etc. measurments.

The EMS business makes money on the turn over of inventory (components) and when that turn over reduces the margin of return drops very fast. E.G. 4% return times 10 turn overs equals (roughly) 40%. Drop the turn over to 5 and it equals 9%. Can you reduce the staff as fast as the turn over drops? Probably not.

Next major element to inquire about is Managements ability to reduce staff without losing their competitive profitability and quality. The difference beteween Solectron and Jabil maybe the difference on how Management 'manages' the cost reductions. My preference as a long-time investor would be to have the Company take short-term earning hits and prepare for the future by using the 'extra' (people you might lay-off) to solve any past or percieved issues / problems.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.