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Client diversity paying off for Jabil

Jabil Circuit closed its fiscal year with quarterly revenues rising 25 percent and net income more than doubling, as its strategy of diversifying its client base continued bearing fruit. The performance slightly beat Wall Street expectations.

"I would characterize the current environment as stable and steady," Tim Main, president and chief executive of the St. Petersburg contract electronics manufacturer, said in a conference call with analysts late Tuesday.

Net income in its fourth quarter ended Aug. 31 rose 120 percent to $44.3-million, or 22 cents a share, compared with $20.1-million, or 10 cents a share, in the year-ago period. Revenues were in line with forecasts, rising 25 percent to $1.63-billion, compared with $1.30-billion last year.

For the fiscal year, net income surged 288 percent to $166.9-million, or 81 cents a share, up from $43-million, or 21 cents a share. Revenues rose 32 percent to $6.25-billion compared with $4.73-billion a year ago.

Excluding one-time charges, Jabil said its core income was $54.7-million, or 27 cents a share. Analysts surveyed by Thomson First Call had forecast Jabil to earn 26 cents a share on $1.63-billion in revenue.

The numbers were on the high end of a more conservative range that Jabil released in June.

After a sharp downturn in business several years ago, particularly in computing and telecom, Jabil embarked on an effort to diversify from a core client base that includes Cisco Systems and Hewlett-Packard.

The diversity has been paying off throughout the year.

Two of its main sectors, telecommunications and computer networking, were more sluggish than expected. But they were offset by an uptick in other areas, notably consumer electronics and medical instrumentation.

"If they all went south at the same time, we'd feel that," Main said, "but the overall environment is stable and steady."

Looking ahead to the first quarter, Jabil chief financial officer Forbes Alexander forecast a 10 percent increase in the automotive sector, a more than 20 percent increase in medical instrumentation and a 30 percent surge in consumer electronics, which is entering its peak demand season.

For the first fiscal quarter, Jabil said it expects revenue between $1.75-billion and $1.85-billion with core earnings between 30 cents and 32 cents a share. For 2005, the company projected revenue of $7.2-billion to $7.4-billion with core earnings of $1.20 to $1.24 per share.

Jabil released its results after the close of market. Its shares closed Tuesday at $22.18, up 29 cents or 1 percent. In after-market trading, shares rose 8 percent.

Times wires contributed to this report. Jeff Harrington can be reached at harringtonsptimes.com or (813) 226-3407.

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