Hello everyone. I've been working for Jabil a little over a year now at the St. Petersurg headquarters. I must say that Jabil is a strong company with a good future. We just expanded our facilities by adding another building. Production is a little slow right now because of line transfers but believe me it will pick up. I'm not sure how specific I can be on here so excuse me if I seem vague. Even though I get the stock at a discount after January 1st I still bought some on the outside today. The price was just too good to pass up.
Thank you for posting stc88. I wish I had purchased more as well, but alas, I don't want to start selling other stocks that were knocked about to do so. Could you explain in laymans terms what the line transfers are? I appreciate your viewpoint and realize that you must be careful, but any tidbits you can comfortably toss will be gobbled up!Thanks,Jaipur
Line transfers mean that the assembly line is dismantled and moved to another location. When all is completed we will have two buildings dedicated to one of our largest customers. We are also in the process of transferring some of our other products here from out west. The biggest drawback to all of this is that it stops production which can hurt earnings. Once all of our buildings are at full capacity it's full steam ahead. I truly believe that OEM's are starting to see the benefits of using CM's like Jabil. Feel free to ask me any questions. I can't be too specific but I'll try to answer them the best I can.
stc88,"We are also in the process of transferring some of our other products here from out west. The biggest drawback to all of this is that it stops production which can hurt earnings"Does this mean that work that has been performed here in Idaho is moving to Florida?? Jabil has been expanding here as well so this is a bit of a surprise, but maybe it's part of a "customer consolidation".Thanks, again, stcJaipur
As far as I know Idaho is remaining the same. I was referring to California. The Cali. plant is not down sizing just moving certain projects to Florida. When those projects leave they will be replaced with new ones. Things change here constantly due to customer demands. I'm involved with the California transfer so if it changes I will post again.
stc,This may be common knowledge, can't remember, but does Gateway represent a very large portion of Jabil's production?? Considering the hit yesterday you would think so, but rationality and the market seem to be strangers lately so I will make no assumptions.Jaipur
The biggest percentage of our business comes from Cisco and HP. We do build boards for many other companies but nothing for Gateway over here. I was told that some mutual fund manager sold 200,000 shares of Jabil the other day and that was the cause for the drop. This is just hear say though, I haven't seen any proof of that yet. I'm holding onto JBL the long haul. I only wish I had been working here 5 years ago when stock was $7 a share.
Gateway account is about 5% of JBL revenues, it was planned (and is planned) to move it down to 2.5% next year as part of a diversification from PC industry dependence.Based on 5% and the assumption that Gateway will drop its orders to JBL by 20% (more likely the will stay flat anyway), JBLs revenues will be affected by a mere 1%. More probable JBL will have good use for the capacity anyway. I am not sure if JBL will really notice Gateways slowdown at all.The steep decline in stock price is just a general mood that PC sales are slowing down due to deceleration of US economy, weak Euro and market saturation. This explains the overreaction because these feelings can not be quantified into a a new valuations of the ECMs. Market seems to be split into bears awaiting a general slowdown in electronic devices sold affecting the ECMs, and bulls assuming that this is way overdone and outsourcing activity would anyway rather accelerate in this scenerio due to higher cost pressure at the OEMs.M.
Jabil is up after Credit Suisse First Boston raised its rating to strong buy from buy, but cut its 12-month price target to $52 from $70. Jabil and other contract electronics manufacturers sank Thursday after Gateway warned it would miss estimates. But CSFB said Gateway's impact on Jabil was exaggerated. [TheStreet.com]Fredix
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