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Jabil's Fiscal 2018 Second Quarter Results

Jabil held its earnings call on March 15, covering the second quarter of its fiscal year 2018. “I’m pleased with the results of our second quarter, which was characterized by strong revenue growth, core operating income expansion and healthy cash flow generation,” said CEO Mark Mondello. 

The company reported net revenue of $5.3 billion for the quarter – with 54 percent comprised from Jabil's Electronics Manufacturing Services (EMS) business and 46 percent from Jabil's Diversified Manufacturing Services (DMS) business. The DMS division saw a net revenue increase of 38 percent and the EMS division saw a seven percent increase, averaging a net revenue increase of 19 percent across the company.  

“Additionally, we invested in several new programs, returned approximately $150 million to shareholders via our capital return program and successfully renewed 10-year senior notes at a more favorable rate," stated Mondello. "These activities, both operational and strategic, position us well as we remain focused on diversifying our earnings and cash flows.”  

Current Business Updates 

  • Jabil's DMS segment earned $83 million during the quarter with $2.4 billion in revenue, representing a 54 percent increase in earnings year-over-year. 
  • A key catalyst for Jabil Green Point's success was having less dependency on one product type and growing a broader product portfolio. The team is leveraging their mechanics and materials science expertise to ramp two significant program wins with new customers: one in non-mobility consumer goods and another in augmented reality.  
  • The Healthcare and Packaging businesses captured share as they lean into favorable market trends. The demand for affordable, results-oriented healthcare in conjunction with evolving technology needs being requested from the packaging market allows Jabil to post strong, double-digit growth. These businesses are profoundly integral to Jabil's story. 
  • Finally, the EMS division is driving a progressive transformation as it delivered $95 million in earnings during the quarter with roughly $2.9 billion in revenue. The EMS team leverages end-to-end engineering solutions, deep domain knowledge and exceptional day-to-day operational execution. Half of the generous revenue growth of this segment comes from new, strategic customer engagements in semi-capital equipment, optical networking, industrial and energy, telecommunications and the connected home industries.  

"Jabil's leadership remains confident, because we are strengthening our business base by selectively expanding existing relationships and adding new customer relationships with many top brands," said Mondello and concluded: "At Jabil, we have the scale, infrastructure and talent to offer us the opportunity to move closer to our aspirational goal: to become the most technologically advanced manufacturing solutions company in the world."