Jabil Circuit Inc. (NYSE:JBL) Q1 2018 Earnings Conference Call Transcript

Dec 14, 2017 • 04:30 pm ET


Jabil Circuit Inc. (NYSE:JBL) Q1 2018 Earnings Conference Call Transcript


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Ladies and gentlemen, thank you for standing by, and welcome to Jabil's First Quarter Fiscal Year 2018 Earnings Conference Call. (Operator Instructions)

I would now like to turn today's conference over to Beth Walters, SVP of Communications and IR.

Beth Walters

Thank you, operator, and welcome, everyone, to our first quarter of fiscal year 2018 earnings call. Joining me today are our CEO, Mark Mondello; and our CFO, 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 first quarter press release, slides and corresponding webcast links are also available on our website.

(Forward-Looking Cautionary Statements)

Today's call will begin with Mark, with his comments on our outlook for the business in fiscal 2018. Forbes will follow with comments on our first fiscal quarter results and guidance for our second quarter of 2018. Following our prepared remarks, we will open it up to questions from our call attendees. I'll now turn the call over to Mark.

Mark Mondello

Thanks, Beth. Good afternoon. I always appreciate everyone taking time to join our call. I'll begin by thanking our folks here at Jabil for their continued dedication and commitment. I'd also like to extend my sincere gratitude to each and every employee here at Jabil for making safety their personal priority. You see, keeping people safe is Job 1 in all we do. And finally, I'd like to wish each of you a peaceful and blessed holiday season.

Now let's take a look at our first quarter results. The quarter was excellent as the team delivered $227 million in core operating income on revenues of approximately $5.6 billion, resulting in core earnings per share of $0.80. For me, these results further illustrate the strength and diversification of Jabil's income, especially when paired with our outlook for the balance of the year. I'm pleased with the quarter and the nice start to fiscal 2018. As customary, Forbes will provide more detail around our results during his prepared remarks.

I'd now like to address current business at hand, starting with our EMS segment. Jabil's EMS team is driving a progressive transformation, advancing their methods in which they serve a broad range of end markets. Markets such as energy, industrial, print and retail, automotive, semi-cap equipment, networking telecom and data storage. A key element of the transformation is the deliberate pivot towards higher-margin businesses, as the team leverages engineering excellence and deep domain know-how day in and day out. In short, this is what we refer to as EMS 2.0. Clearly, our EMS value proposition has taken hold. Our team has done an outstanding job performing to plan, seeing core operating margins approach 4% for the year, while showing revenue growth of 3.5% year-on-year. It's good news all the way around.

Next, I'll move to our DMS segment, starting with our high-growth health care and packaging businesses. These two businesses continue to grow at a rate of 20% to 25% per year through fiscal 2019, a