Jabil's Q2 Losses Slip Even More
ST. PETERSBURG, FL -- Jabil reported second-quarter revenues fell 5.5% to $2.89 billion. The net loss was $42.1 million, down from a loss of $24 milion a year ago.
The GAAP operating loss was $500,000, down from $1.6 million the prior year. Excluding one-time items, Jabil reported core earnings of $27.3 million. Sequentially, revenues declined 15%.
EMS sales slipped 16% sequentially to $1.67 billion. The consumer division (36% of sales) dropped 15% sequentially. Automotive (3%) fell 31% sequentially, computing and storage (12%) dropped 6%, industrial instrumentation and medical (19%) declined 10%, networking (17%) decreased 20%, and telecommunications (5%) fell 32%.
During the quarter, the company's sales cycle contracted by four days to 20 days. Days sales outstanding improved by eight days to 36, while accounts payable days fell by four days to 62 days. Cash flow from operations was $343 million in the quarter reflective of net working capital contractions.
Capex during the quarter was approximately $70 million. Capital expenditures will continue to slow through the third quarter given the overall macro demand environment, the company said.
Jabil announced restructuring activity a total of approximately $65 million over the balance of fiscal 2009 and fiscal 2010, $54 million in cash, $32 million of which was recorded in the second quarter. The moves are expected to save $55 million in annually.
Jabil guided for third quarter revenue of $2.5 billion to $2.7 billion and core operating income between zero and $40 million.
On a conference call with analysts, president and CEO Tim Main said, "I think we have just really recently over the last three or four weeks started to see a little bit more stability."
CFO Forbes Alexander added, "There is some uptick with OEMs looking at their fixed costs base versus moving to a more variable model in the EMS space."
