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Hello Anyone,

This is a very good overview of recent financials and highlights Jabils move into communication products and diversification in general which will only make this good company better!

9/22/00 - Jabil eyes growth as profits jump 133%

Sep. 22, 2000 (Electronic Buyers News - CMP via COMTEX) -- Jabil Circuit Inc.'s move into the red-hot communications sector is paying off, setting the top-tier contract electronics manufacturer on course to increase its fiscal 2001 revenue by 50%, to $5.4 billion.
The courtship of customers such as Redback Networks, Sycamore Networks, and JetStream has created a revenue stream that's reducing the St. Petersburg, Fla., company's dependence on the price-sensitive PC market.

Jabil is poised to reap additional financial rewards from those associations as other telecom and datacom OEMs join its stable of communications clients, according to company executives and analysts during a conference call and in interviews.

Last week, Jabil unveiled the initial results of its chang-ing customer landscape. Strong demand for communications products lifted the company's fiscal 2000 fourth-quarter profits 133%, while revenue rose 77%.

During the quarter ended Aug. 31, Jabil's net income climbed to $47 million, or 24 cents a share, from $20.1 million, or 11 cents a share, in the comparable year-ago quarter. Results for the fiscal 1999 fourth quarter included an acquisition charge of $7 million.

The CEM's sales in the most recent quarter rose to $1.06 billion, from $602.3 million in the corresponding 1999 quarter. For fiscal 2000, Jabil's net income rose 72%, to $145.6 million, or 78 cents a share, from $84.8 million, or 49 cents a share, in fiscal 1999. Revenue in the most recent fiscal year increased 59%, to $3.55 billion from $2.23 billion in fiscal 1999.

"The overall business fundamentals are robust," said Tim Main, Jabil's president, who added the title of chief executive to his resume last week. Main replaced William D. Morean, who remains chairman of the company's board of directors.

During the quarter, communications accounted for 52% of Jabil's sales, followed by peripherals at 24%, computers 18%, consumer 4%, and auto equipment 2%. The CEM's top customers were Cisco, which accounted for 20%, Dell Computer 16%, Hewlett-Packard 14%, and Lucent Technologies 10%.

Despite shortages of certain key electronic components, Jabil was able to execute its manufacturing activities during the quarter and "successfully navigated the tight materials market without significant balance sheet distortions," Main said.

Jabil is reviewing a number of acquisition opportunities in various end-markets as part of its growth strategy, according to Main.

Jabil has been expanding since last year when it purchased a plant in China from GET Manufacturing Inc., a Hong Kong-based CEM. In February, Jabil acquired a plant in Contagem, Brazil, from Bull Information Technology, a subsidiary of French conglomerate Groupe Bull.

Jabil has since established plants and expanded its manufacturing sites abroad and in the United States. The company's plants in China, Hungary, Malaysia, and Mexico are undergoing expansion to meet rising customer demand, analysts said.

"Now, with a global manufacturing infrastructure in place, Jabil is beginning to fill these operations with customer programs," said Jerry Labowitz, an analyst at Merrill Lynch & Co. Inc. in New York. "In total, Jabil expects to expand its global capacity by 40% in fiscal 2001 with a majority of the square footage coming from lower-cost locations."

Analysts expect Jabil's communications and automotive businesses to show strong growth in the current quarter. Communications should remain strong due to the addition of several customer programs, the analysts added.

"Jabil's currently ramping new automotive programs, and the CEM's peripheral market should continue to level off while the PC and consumer-sector segment could rise modestly," Labowitz said.


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