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Jabil Posts First Quarter Results

Today Jabil Circuit, Inc. (NYSE: JBL), announced its preliminary, unaudited financial results for the first quarter of fiscal year 2013. The company reported first quarter revenue of $4.6 billion. “Diversified Manufacturing Services increased to 47 percent of our overall business, paced by outstanding growth in Specialized Services,” said Timothy L. Main, President and CEO of Jabil.

Jabil’s Diversified Manufacturing Services business grew 20 percent in the first quarter of fiscal 2013 when compared to results of the first quarter of fiscal year 2012. The company’s Enterprise & Infrastructure business increased 17 percent from the first quarter of fiscal year 2012 while Jabil’s High Velocity business declined 20 percent during the first quarter of fiscal year 2013, as compared to fiscal 2012.

Generally accepted accounting principles (GAAP) operating income for the first quarter of fiscal year 2013 was $170 million. Excluding amortization of intangibles and stock-based compensation, core operating income was $193 million. GAAP diluted earnings per share was $0.51 cents and core diluted earnings per share was $0.61 cents.

“We are pleased to have generated cash flow from operations of $152 million during the quarter. As a result of this outstanding performance and the ongoing strength of our balance sheet, we were able to return $148 million in capital to shareholders during the first quarter of fiscal year 2013 through dividends and share repurchases,” said Chief Financial Officer Forbes Alexander. “We see this positive performance continuing and continue to estimate operating cash flow of $1 billion in fiscal 2013,” Alexander noted.

(Definitions used: "GAAP" means U.S. generally accepted accounting principles. Jabil defines core operating income as GAAP operating income before amortization of intangibles, stock-based compensation expense and related charges, restructuring and impairment charges, goodwill impairment charges, certain distressed customer charges, settlement of receivables and related charges and loss on disposal of subsidiaries. Jabil defines core earnings as GAAP net income before amortization of intangibles, stock-based compensation expense and related charges, restructuring and impairment charges, goodwill impairment charges, certain distressed customer charges, settlement of receivables and related charges, loss on disposal of subsidiaries, certain other expenses, net of tax and certain deferred tax valuation allowance charges. Jabil defines core diluted earnings per share as core earnings divided by the weighted average number of outstanding diluted shares determined under GAAP. Jabil calculates core return on invested capital by annualizing its after-tax core operating income for its most recently-ended quarter and dividing that by a two quarter average net invested capital base. Jabil reports core operating income, core earnings, core diluted earnings per share and core return on invested capital to provide investors an additional method for assessing operating income, earnings, diluted earnings per share and return on invested capital from what it believes are its core manufacturing operations. See the accompanying reconciliation of Jabil's core operating income to its GAAP operating income, its calculation of core earnings and core diluted earnings per share to its GAAP net income and GAAP earnings per share, its calculation of core return on invested capital and additional information in the supplemental information.)

Operational Highlights Fiscal Q1 2013 versus Fiscal Q1 2012

  • Diversified Manufacturing Services increased 20 percent.
    • Specialized Services revenue expanded 51 percent.
    • Healthcare & Instrumentation revenue declined 22 percent.
    • Industrial & Clean Tech revenue declined 9 percent.
  • Enterprise & Infrastructure revenue increased 17 percent.
  • High Velocity revenue decreased 20 percent.
  • Cash flow from operations increased to $152 million.

Quarterly Results

     

Q1 2013

     

Q1 2012

 
Net revenue $4.6 billion $4.3 billion
GAAP operating income $170.3 million $170.8 million
GAAP net income $105.8 million $112.9 million
GAAP diluted earnings per share $0.51 $0.54
GAAP return on invested capital 21% 26%
Core operating income $192.5 million $194.6 million
Core earnings $127.8 million $136.2 million
Core diluted earnings per share $0.61 $0.65
Core return on invested capital 24% 30%
 

Repurchased $129 million worth of shares and returned $19 million to shareholders via dividends during the quarter.

Business Update

"Expectations for the second fiscal quarter of 2013 are consistent with seasonal patterns of demand," said Jabil CEO Timothy Main. "End market demand remains muted in business sectors exposed to government and business spending. Although environmental conditions continue to be uncertain, we maintain our expectation that fiscal 2013 will be another record year for Jabil.”

Fiscal Q2 2013 Guidance Range

 
Net revenue       $4.3 billion to $4.5 billion
Core operating income $165 million to $185 million
Core earnings per share $0.50 to $0.58 per diluted share
GAAP earnings per share $0.40 to $0.48 per diluted share
 

(GAAP earnings per share for the second quarter of fiscal 2013 are currently estimated to include $0.02 per share for amortization of intangibles and $0.08 per share for stock-based compensation).

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