Business: Jabil CEO urges patience

Business

Special report

Last mission to repair the Hubble telescope
Hubble space telescope discoveries have enriched our understanding of the cosmos. In this special report, you will see facts about the Hubble space telescope, discoveries it has made and what the last mission's goals are.
More special reports

Video report

For their own good
Fifty years ago, they were screwed-up kids sent to the Florida School for Boys to be straightened out. But now they are screwed-up men, scarred by the whippings they endured. Read the story and see a video and portrait gallery.
More video reports

Multimedia report

Rays fan guide to the Trop
Here are some insider tips to Tropicana Field and area information.
More multimedia reports

Jabil CEO urges patience

He asks those at a shareholders' meeting to stay calm, despite the company's declining stock.

By MADHUSMITA BORA, Times Staff Writer
Published January 18, 2008

With stock prices hovering at $14, Jabil Circuit CEO Tim Main rallied investors Thursday at the company's annual shareholders' meeting, urging them to stick with the company.

"Nobody's more frustrated than I am," Main told shareholders who questioned the declining stock of the St. Petersburg-based electronics manufacturer. "The only silver lining is it's a good time to buy."

Thursday's meeting put the company back on schedule for its annual briefing with investors. The company had its last shareholder event in August, seven months behind schedule. The delay was caused by allegations of the company's involvement in a stock options backdating scandal. Jabil seems to have moved past the stigma after it was cleared by an internal investigation.

"Their weakness (in the stock market) has nothing to do with the options situation. That was resolved in their favor," said Alexander Blanton, an analyst with Ingalls & Snyder LLC.

Blanton doesn't hold any Jabil stock, and his company has no investment banking relationships with Jabil. He believes Jabil has done well compared with the Dow, which plummeted more than 300 points Thursday. He said Jabil's disappointing performance has a lot to do with the company's revised guidance for the second quarter.

In December, Jabil shares tumbled after it predicted a profit of 16 to 20 cents per share in the second quarter. Analysts were expecting 31 cents per share. For the fiscal year, Jabil said it expects net income of $1.20 to $1.50 per share, excluding one-time charges.

Main said business is improving and Jabil has good profit margins, has better cash flow and is expanding its return on capital investment. But, he said, investors are shying away because the industry itself is trading at an all-time low. Main believes there are better times ahead once the industry consolidates.

The company will consider options such as buying back its stock and pursuing strategic and smaller acquisitions, while focusing heavily on retaining its clients and growing its business, Main said.