Saturday, February 24, 2018
Business

Jabil's hint of downturn drops stock, as analysts fret its Apple business may slow

ST. PETERSBURG — Global electronics manufacturer Jabil posted second-quarter earnings Wednesday that inspired CEO Mark Mondello to say he was "pleased" with the results but prompted analysts to fret that the company may be losing momentum

The chief concern: Apple.

Jabil makes cases and other parts for Apple's hugely successful iPhones, among other products. Apple has ranked as one of Jabil's chief customers for years and remains a key reason behind its growth.

Jabil shares fell 1.2 percent over the past year but dropped 8 percent to $20.20 in after-hours trading Wednesday.

"I'm pleased to report second-quarter results that were largely in line with our guidance and expectations," Mondello said. While praising the "outstanding" performance of one of Jabil's business segments, he added a cautionary remark about Jabil's "DMS", or "diversified manufacturing segment" — Jabil-speak for the business that includes Apple. That segment, he said, "grew modestly as we faced a slight downturn in product demand late in our fiscal quarter specific to our mobility business."

For the next quarter, Jabil projected core profit of 12 to 18 cents a share — sharply lower than analyst estimates — on $4.1 billion to $4.3 billion in revenue, with diversified manufacturing services revenue projected to fall 10 percent from the same period last year. At this pace, Jabil is now likely to hit $18.5 billion in revenues for this year, while earlier being on track to top $20 billion.

In Wednesday's second-quarter announcement, Jabil reported net income of $78.9 million on revenues of $4.4 billion. It remains one of Tampa Bay's largest public companies with more than 140,000 employees across two dozen countries.

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