Jabil Circuit takes more than a jab at contract electronics manufacturing. The company is one of the leading providers of electronics manufacturing services (EMS) in the world. Parts made by Jabil on a contract basis are used in communications products, medical instruments, computers and networking gear, and automobiles. Services range from product design and component procurement to product testing, order fulfillment, and supply chain management. Top customers include Apple, Cisco Systems, GE, IBM, Research in Motion, HP, and NetApp. The company, which has expanded into Asian and Eastern European markets, gets 86% of sales from international operations.
In fiscal 2011 Jabil's sales rose by 23%. The improvement was due to increased revenues and new programs related to existing customers. The company saw strong double-digit sales growth for products in the specialized services, instrumentation and healthcare, industrial and CleanTech, Enterprise & Infrastructure, and High Velocity Systems categories. The company also derives a small portion of revenues from aftermarket repair and warranty services for the products it makes. Jabil's has profitability improved dramatically, jumping from a net loss of $1.2 billion in 2009 to net income of $170 million in 2010. The loss in 2009 was due in part to a $1 billion goodwill impairment charge. Net income surged to $382 million in fiscal 2011.
To compete in a rapidly consolidating industry, Jabil provides production on a global scale and operates through semi-autonomous business units that are dedicated to individual customers. The company continues to add services and to expand globally through acquisitions, including deals to acquire manufacturing operations from customers looking to reduce costs through outsourcing. Jabil has acquired or established manufacturing facilities in regions with lower operating costs, including Brazil, China, Hungary, India, Malaysia, Mexico, Poland, Russia, Turkey, Ukraine, and Vietnam.
In other regions, the company rid itself of operations, particularly in Europe, where production costs are higher. Jabil sold its French and Italian operations in 2010, as well as its automotive subsidiary in Western Europe during 2009. However, months later, in 2011, Jabil bought back three of its former operations in France and Italy to appease affected customers.
Back on domestic soil that year, Jabil acquired Texas-based Telmar Network Technology to bolster its aftermarket services. With nearly $150 million in sales in 2010, Telmar's communications and network products and services was to be integrated with Jabil's Diversified Manufacturing Services segment.
Chairman William Morean and his family own more than 12% of Jabil Circuit.
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