Jabil's COVID-19 Costs Less Than Expected; 5G Going Well; Stock Up
Jabil’s $7.3 billion in revenue for fiscal Q4 ended Aug. 31 exceeded the high range of its guidance, reported the contract manufacturer Thursday. There were fewer supply chain disruptions than anticipated, Chief Financial Officer Mike Dastoor told investors, meaning “higher…
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than expected throughput in our plants.” The stock closed up 6.5% at $34.41. Jabil’s diversified manufacturing services segment includes mobility and connected devices, while electronics merchandising services include 5G wireless and cloud infrastructures, said Dastoor. “Teams in both segments quickly moved to capitalize on upside demand, mainly in the mobility, 5G and cloud end markets.” As more people worked and learned from home, Jabil had “good demand for products such as tablets, headphones and smartwatches,” he said. “We expect this dynamic to remain” well into fiscal 2021, he said. “Adoption of 5G will provide a further catalyst for future growth.” The launch of 5G devices “is going extremely well,” he said. Pandemic costs in Q4 at the 100 factory "sites" Jabil runs in 30 countries were $25 million lower than the company expected, said Dastoor. They exceeded $55 million in February when “things were blowing up,” said CEO Mark Mondello. Costs began to “dissipate” in July and improved further through August, he said. Mondello expects the trend to continue, “assuming that the whole road doesn’t blow up again,” at which point “all bets are off."