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ST. PETERSBURG — Technology manufacturer Jabil Circuit posted a 51% drop in profits primarily due to restructuring charges.
The company reported net income of $50.1 million on revenues of $4.47 billion in its fiscal third quarter ended May 31. Jabil recorded $28 million in realignment costs in the quarter, says CEO Mark Mondello, who added that a $188 million restructuring is necessary.
The St. Petersburg-based company, with more than 100,000 employees, 2012 revenue of $17.2 billion and 10 million square feet of manufacturing capacity, hasn't reset structural costs in more than seven years, Mondello said in a Wednesday call with analysts. Jabil executives declined to say what sites will be closed or how many employees will be affected.
But Mondello calls the restructuring a “prudent decision, tactically, strategically and financially,” according to a transcript of the call posted on SeekingAlpha.com. “We are constantly evolving our resources, our assets and our capacity as our business grows and needs change,” he says.
Jabil expects to incur $188 million in charges related to restructuring, including the $28 million recorded in the third fiscal quarter. Between $60 million to $70 million will be recorded in the fourth fiscal quarter for 2013, and the balance during fiscal 2014 and 2015.
On Wednesday, Jabil announced it received regulatory approval and antitrust clearances for its $655 million purchase of Clinton, Mass.-based Nypro, which provides manufactured precision plastic products for the health care, packaging and consumer electronics industries. The acquisition is expected to be completed on July 1.
Jabil is publicly traded (symbol: JBL; recent price: $19.45).
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