Jabil FY 2Q16 Earnings Call Notes

Jabil Circuit’s (JBL) CEO Mark Mondello on Q2 2016 Results

Jabil is 50 years old

“I’d like to take a minute and acknowledge our 50th anniversary here at Jabil. 2016 is Jabil’s 50th year as a going concern. To me that’s an amazing accomplishment.”

Volatility in the mobile market can be maddening

“I’d now like to circle back to our Green Point business. As we know, this business has a well understood high-beta characteristic. Our Green Point team manages large scale demand fluctuations really well. In fact, I’d argue they do it better than anyone. Dealing with this volatility can be maddening. With that said, our continued participation in the mobility market is key to Jabil’s holistic approach to the overall ecosystem, a technology ecosystem that squarely relies on handheld computing.”

Mobile devices are here to stay

“Mobile devices are here to stay. They monitor and control an infinite number of connected devices as well as connect all of us in our daily lives. Apple remains dominant in this space and we’re fully committed to serving their brand.”

Weakness in mobility really hit us hard in the last four weeks or so

“Sure Steve. So we started seeing some softness in our Greenpoint business in the late January early February timeframe and I think that’s because of our position in supply chain. So we started seeing the softness in January and it really accelerated in February. And we had some modest declines that impacted Q2. So as I mentioned in my prepared remarks, we were down about $150 million in revenue but the outlook and the abruptness of the outlook for most certainly Q3 and then a portion of Q4 really hit us hard in I would say the last four weeks so.”

We are very very supportive with our largest customer

“let me start with, I love our biggest customer. And we’ll continue to make investments for them and we will be prudent in that. I think our ability to partner with them is outstanding, I think our ability to handle their volatility if and when it occurs is really, really good and I have a lot of confidence in Apple. So on the diversification side, what I can tell you is we are very, very supportive with our largest customer. We are seeing very good diversification within that large customer, but at the same time, we have a balance sheet such that we are leaning hard into our healthcare business, we are leaning hard into our EMS business”

The volatility sucks, but it is a lot different than 14 for us because we’ve diversified a bit more

“Yes, it sucks. I mean, as far as – I would love to be able to run our business on a quarter-to-quarter basis and I don’t like it at all and I take it to it heart, we have committed investors and it bothers me. But I think it’s drastically different, Amit, as far as fiscal year ’14. If you take a look at fiscal year ’14, we had a dramatic downturn as everybody knows on a program and for that year the company – I don’t remember the exact numbers, but I think we made about $340 million dollars in operating income. Today, we’ve got some abrupt downturns and the company is going to do $700 million. So I think it’s drastically different and I think what’s different about it is is we started three, three-and-half years ago to really drive in diversification throughout the company”