Make us your home page
Instagram

St. Petersburg's Jabil seeks to strengthen its brand amid brutal global competition and Trump's job promises

St. Petersburg’s Jabil is trying to strengthen its brand in a cutthroat industry. This is its Blue Sky Center in Silicon Valley. [Photo courtesy of Jabil]

St. Petersburg’s Jabil is trying to strengthen its brand in a cutthroat industry. This is its Blue Sky Center in Silicon Valley. [Photo courtesy of Jabil]

Simple question: How is global electronics manufacturer Jabil doing these days?

Except it's not an easy answer — despite Jabil reporting quarterly results and its shares soaring by double digits Friday morning to hit their highest price in more than a year.

The St. Petersburg company best known in recent years for making iPhone casings for Apple reported $5.1 billion in revenues for its first fiscal quarter of 2017, down slightly from $5.2 billion the same three months last year. Net income dropped to $88 million from $131.9 million.

Jabil CEO Mark Mondello, speaking to analysts in a conference call, said the financial results were stronger than management anticipated, "reflecting the second-best quarter in Jabil's 50-year history in terms of both revenue and core operating income."

Wall Street investors apparently agreed, driving Jabil shares up more than 12 percent by the close of Friday's markets, topping $24 — a stock price not seen since early December a year ago.

"Jabil has evolved into a proud owner of a diverse set of outstanding businesses, businesses that offer services and solutions with specialized and differentiated capabilities to a broad range of end markets," Mondello told analysts.

"We are the brand behind the world's best brands," he said. "As a management team, we have a lofty goal for Jabil's brand, a goal to become the world's most advanced manufacturing solutions company."

Great branding ambitions. But let's pause a moment.

I've covered Jabil for decades and remain impressed with the intensity of innovation, sheer depth of a corporate culture spread across 27 countries outside the United States, and the personal pride Jabil's workforce has long exhibited. Jabil managers are typically smart and all too aware they operate amid globally cutthroat competition. The fact that Jabil continues to adapt and scrap for new business opportunities should be a role model for any startup or established company — anywhere.

But let us also be honest. Jabil, like any multibillion-dollar public corporation, faces headwinds, especially in a technology sector confronted with constant, rapid change every day. To name just a few:

• Jabil's recent successes are closely tied to making iPhone casings for Apple, its largest customer generating more than 20 percent of Jabil's business. Jabil is diversifying its customer base into health care, product packaging and maybe even wearable tech working with sports clothing maker Under Armour. But that takes time. And to be frank, riding Apple's coattails with iPhone sales has been a historic rocket ride.

• The compensation of Jabil executives, disclosed this month, reflect a tougher business climate. Mondello's pay stayed at $10.5 million or so, but other senior execs saw their pay drop sharply by more than 20 percent.

• Jabil has about 138,000 employees worldwide. That's down from more than 150,000 a few years ago, reflecting a tightening of the workforce to control costs. Earlier this fall, it laid off about 400 employees worldwide. About 100 were in St. Petersburg.

• Finally, consider Jabil's basic numbers in recent years. Its revenues of $18.4 billion in fiscal 2016 are higher than any time in recent years. But its net income in 2016 of $254 million is down $40 million from 2015 and off more than a third of what Jabil earned in 2012.

• Let's throw out one more wild card for Jabil: Donald Trump. As president, Trump wants to pressure U.S. companies to bring manufacturing jobs back from places like China, where Jabil is deeply invested. This will be interesting to watch.

Bottom line: Jabil remains a cutting-edge, vital company. But we're talking brutal competition — and now some political curve balls — out there.

Contact Robert Trigaux at rtrigaux@tampabay.com. Follow @venturetampabay.

How's Jabil doing over the years?

2016 net revenue2015201420132012
$18.4B$17.9B$15.8B$17.2B$16.1B
2016 net income
$254M$294M$241M$371M$395M
2016 net revenue2015201420132012
$18.4B$17.9B$15.8B$17.2B$16.1B
2016 net income
$254M$294M$241M$371M$395M

Source: Jabil SEC filings

St. Petersburg's Jabil seeks to strengthen its brand amid brutal global competition and Trump's job promises 12/16/16 [Last modified: Friday, December 16, 2016 8:17pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. SeaWorld shares drop Monday to 2017 low after disclosure of federal subpoena

    Tourism

    The Orlando parent company of SeaWorld and Busch Gardens theme parks saw its stock drop 3.5 percent Monday to $15.10, its lowest price of this year.

    Killer whales perform at Shamu Stadium at SeaWorld in Orlando in 2011, before public pressure was placed on the theme park company to curtail its orca shows.SeaWorld has since announced an end to the traditional killer whale entertainment  at its theme parks. [AP Photo/Phelan M. Ebenhack]
  2. Rick Scott appoints longtime ally Jimmy Patronis as Florida CFO

    State Roundup
    Rick Scott appoints Jimmy Patronis (background) as CFO. [STEVE BOUSQUET | Tampa Bay Times]
  3. Local gas prices plummet as Fourth of July holiday travel approaches

    Tourism

    TAMPA — Local gas prices are enjoying an unseasonal dip around the $2 mark just in time for the hectic Fourth of July holiday travel weekend.

    The price of regular unleaded gasoline has dropped to $1.99 at a Rally station on Pasadena Ave. South and Gulfport Boulevard South, South Pasadena.
[SCOTT KEELER   |   Times]

  4. Air bag recalls, lawsuits lead Takata to file for bankruptcy

    Autos

    Shattered by recall costs and lawsuits, Japanese air bag maker Takata Corp. filed Monday for bankruptcy protection in Tokyo and the U.S., saying it was the only way it could keep on supplying replacements for faulty air bag inflators linked to the deaths of at least 16 people.

    Japanese air bag maker Takata Corp. CEO Shigehisa Takada bows during a press conference in Tokyo on Monday. Takata has filed for bankruptcy protection in Tokyo and the U.S., overwhelmed by lawsuits and recall costs related to its production of defective air bag inflators.
[(AP Photo/Shizuo Kambayashi]
  5. Airbag maker Takata bankruptcy filing expected in Japan, U.S.

    Corporate

    DETROIT — Japanese airbag maker Takata Corp. has filed for bankruptcy protection in Tokyo and the U.S., overwhelmed by lawsuits and recall costs related to its production of faulty air bag inflators.