Jabil Circuit Inc. (NYSE:JBL) Q2 2016 Earnings Conference Call - Final Transcript

Mar 16, 2016 • 04:30 pm ET


Jabil Circuit Inc. (NYSE:JBL) Q2 2016 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to Jabil's Second Quarter Fiscal Year 2016 Earnings Conference Call. [Operator Instructions]. Thank you.

I would now like to turn today's conference over to Beth Walters, Senior Vice President of Communications and Investor Relations. Please go ahead.

Beth Walters

Thank you, operator. Welcome to our second quarter of 2016 earnings call. Joining me today are our CEO, Mark Mondello; and Chief Financial Officer, Forbes Alexander. This call is being recorded and will be posted for audio playback on the Jabil website jabil.com in the Investors section. Our second quarter press release, slides and corresponding webcast links are also available on the website. In these materials, you will find the financial information that we will cover during this conference call.

We ask that you follow our presentation with the slides on the website, beginning with slide two, our forward-looking statement. During this conference call, we will be making forward-looking statements, including those regarding the anticipated outlook for our business, our currently expected third quarter of fiscal 2016 net revenue and earnings results, the financial performance for the company and our long-term outlook for the company. These statements are based on current expectations, forecasts and assumptions involving risks and uncertainties that could cause actual outcomes and results to differ materially.

An extensive list of these risks and uncertainties are identified in our Annual Report on Form 10-K for the fiscal year ended August 31, 2015, on subsequent reports on Form 10-Q and Form 8-K and our other securities filings. Jabil disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Today's call will begin with Mark with his comments on our outlook for the business in fiscal 2016. Forbes will follow with comments on our second fiscal quarter results and guidance for our third fiscal quarter 2016. Following our prepared remarks, we will open it up to questions from call attendees.

I will now turn the call over to Mark.

Mark Mondello

Thanks, Beth. Good afternoon, everyone. I appreciate you taking time to join the call today. Before I begin, I'd like to take a minute and acknowledge our 50th anniversary here at Jabil. 2016 is Jabil's 50th year as a growing concern. To me that's an amazing accomplishment. The best part is, Jabil is stronger and more diversified today than ever before. Thanks to all of our wonderful people for making dreams come true. I will begin today by addressing our second quarter results.

During the quarter we faced sharper than expected declines in product demand within our DMS segment, resulting in a revenue shortfall of $150 million for the quarter. Nonetheless, our team delivered a $186 million in core operating income which was s squarely in the range of our guidance. As such, I'm quite pleased with the results overall. Unfortunately, the modest declines we experienced during the second quarter have now turned into an abrupt downturn, significantly impacting our third fiscal