Jabil Inc. (NYSE:JBL) Q3 2019 Earnings Conference Call Transcript

Jun 18, 2019 • 04:30 pm ET

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Jabil Inc. (NYSE:JBL) Q3 2019 Earnings Conference Call Transcript

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Executive
Mark T. Mondello

third quarter results. The team generated core operating income of $186 million on revenues of $6.1 billion and core earnings per share of $0.57. This was in line with our guidance and 24% higher than last year Q3 to Q3. Within our EMS segment, we saw 26% revenue growth year-on-year, which is driven by cloud, point-of-sale, 5G and wireless and our industrial sector. Our DMS segment delivered a core operating margin of 2.6% for the quarter, representing a 130 basis point improvement year-on-year.

When I step back and I look at the first nine months of the year. I see further demonstration of our financial stability. All-in-all another fine quarter. Michael will provide more detail around our quarter and speak to our forward guidance during his prepared remarks.

So, moving to slide five, you'll find the specific areas that currently have management's attention. These priorities are the foundation from which we serve our customers and our shareholders.

With that let's take a look at slide six where you will find the first area of focus, which is market and product diversification. This colorful pie chart represents a wonderful building block of our story. Within the company, we speak frequently about the importance of diversifying our business, but diversification for the sake of diversification has little relevance.

What is relevant is knowing that as we become less dependent on any single product or product family, we realize much improved reliability around our cash flows. With this improved reliability comes greater simplification of the business. Enhancing our ability to execute. Our results in fiscal '18 and thus far in '19 gives us confidence that our approach is working.

I'll now turn your attention to slide seven where a key element of our strategy is the natural growth of our new business wins. Today, our execution has been sound and our performances ahead of plan. This gives us a high degree of confidence that this $2.4 billion new business will have a favorable financial outlook in fiscal year '20. Just as we committed at the beginning of the year.

For today's call I want to provide an update on our collaboration with Johnson & Johnson medical device company. But before I speak to the slide, I'm pleased to welcome our new team members from the cities of Elmira, Brandywine and Monument. The three J&J factory locations we transferred over to Jabil during the quarter. These new colleagues now join their peers from Torres and Albuquerque and becoming an integral part of our team and again welcome to all. In terms of the collaboration itself, I'm happy to report that both Wave 1 and Wave 2 are now complete and completed on time.

Wave 3 will be next and we trust that will also be very successful and completed on time. Our revenue forecast for this business remains in the range of $800 million to $1 billion for fiscal year '20. Thanks to everyone involved. The teamwork between Jabil and J&J has been sensational.