By Stephen Phillips
Jabil Circuit Inc, a manufacturer of circuit board assemblies this week reported fourth-quarter net income of $26.2m, or $0.30 per share, matching the First Call consensus. In the year-ago quarter, the St Petersburg, Florida-based firm posted net income of just $442,000, or $0.01 per share, including an acquisition- related charge of $20.8m. For the full year, net income swelled 31% to $91.5m on revenue of $2bn – up 69% from last year. Earnings per share came in at $1.12 for the year, a 51% increase.
Jabil’s products are used in telecommunications products (roughly half of sales), PCs and PC peripheral devices. It also offers contract services, with a client roster led by Cisco Systems Inc and 3Com Corp. The firm is the third-largest circuit board manufacturer in the US, trailing Solectron Corp and SCI Systems Inc.
The results impressed Wall Street and investment bank Morgan Stanley Dean Witter raised its earnings per share estimate on the company for fiscal 2000 from $1.45 to $1.50. The consensus of analysts polled by Thomson Financial/First Call tipped 2000 earnings to come in at $1.48 a share.
Results were buoyed by income from the $80m acquisition of Hewlett-Packard Co’s printed circuit board operations in Boise, Idaho and Bergamo, Italy, completed in August 1998. Reduced tax payments due to higher income levels in lower-taxed international operations also boosted income. Jabil’s results statement drew attention to its operation in Guadalajara, Mexico, which has grown quickly to become the firm’s second-largest unit with more than 2000 employees. Tim Main, Jabil’s president, hailed the 1999 results as above our long term operating goals.
The firm said it would incur $0.01 start-up costs for the first two quarters of fiscal 2000 from continuing developments of its leased manufacturing site in Billerica, Massachusetts. It expects to record 60% revenue growth and 48% operating income growth next year. This growth, it says, is significantly above its historical goals, reflecting new business and increased production schedules in several business sectors.
