Jabil Circuit Inc, a fast expanding manufacturer of printed circuit board assemblies, revealed a profitable third quarter on Tuesday but the St Petersburg, Florida-based company warned of a slow-down for the remainder of the financial year. Jabil currently claims to be the third largest circuit board manufacturer in the world, with most of its demand stemming from the communications, PC board and PC peripheral markets. Its third quarter earnings were up 18% on year ago figures at $17.3m with revenues up 25% to $310m. But while earnings were in line with market expectations, sequentially both earnings and revenues are down following a slow-down in demand. And over the short term, the outlook is for flat revenues and falling profits, the company warned. But the expected drop in profits will be due to start up costs for a brand new manufacturing facility based in San Jose, California, combined with the additional costs of Jabil’s purchase in May of Hewlett-Packard Co’s LaserJet printed-circuit assembly assets, including 600 staff. Jabil will, as from August, supply HP’s LaserJet division with printed-circuit boards. Added to which, rumors abound that it’s on the verge of landing two more giant contracts, one from PC maker Dell Computer Corp, and the other from Lucent Technologies Inc. The combination, if successful, would send Jabil’s revenues skyrocketing again. The company’s historic 30% growth rate has taken it from a $300m a year company to a $1bn a year global player in just five years, although it still sits behind Solectron Corp and SCI Systems Inc in the global pecking order. Jabil’s results were announced after the close of markets on Tuesday, but its shares rose 8% on the day to $34.50, riding a tide of optimism in its sector as rival Solectron announced its positive earnings on Monday.
