Jabil (JBL) 16 Dec 172018 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to Jabil's First Quarter Fiscal Year 2018 Earnings Conference Call. [Operator Instructions] Thank you. I would now like to turn today's conference over to Beth Walters, Senior Vice President of Communications and Investor Relations.

Thank you, operator, and welcome, everyone, to our first quarter of fiscal year 2018 earnings call.

Joining me today are our CEO, Mark Mondello; and our Chief Financial Officer, Forbes Alexander. recorded Jabil be Investors website, being playback for section. is the on jabil.com, call and posted will audio This in the

Forward-looking are Slide conference find with the the Our corresponding information our that Statement. website. release, presentation press cover financial X, ask these also during website, that will links follow this In will first on our We available beginning the you slides materials, our slides we with on call. quarter webcast and you

current uncertainties reports intention in ended on Jabil other any the filings. XXXX, for August obligation and XX, on call, our conference making fiscal could statements, fiscal subsequent and uncertainties list report second are securities Form our expectations, this company, Form earnings X-K, risks and and our An actual be year differ and XX-Q disclaims Form our During we outlook identified the new cause involving forward-looking or for forecasts on These and of including will XX-K anticipated events and business the in statements, fiscal for forward-looking as results, update on long-term assumptions revise that our outlook and the for the for Mark, on or quarter outlook these begin to any with performance the XXXX. or call with risk a extensive information, result will whether XXXX company. materially. results revenue Today's outcomes those currently regarding of future net of our to based financial business, otherwise. expected statements his comments are annual

XXXX. our fiscal quarter second our follow will quarter and results first Forbes guidance comments on for of with

attendees. from turn open to questions I'll call to we it Following over our our remarks, will Mark. now prepared the up call

and sincere continued every join making also each I'll Jabil at my Jabil like to their our Thanks, for everyone extend afternoon. by time personal folks our at always safety appreciate begin for gratitude and call. here commitment. dedication thanking I their to employee taking to here priority. Beth. Good I'd

all I'd each Job holiday is peaceful You see, finally, and in people to safe wish X do. we And season. keeping of you blessed a like

Now $XXX the core our on $X.X at in results. operating excellent delivered revenues $X.XX. look core team take of first billion, The quarter million as of earnings income was in let's a per share resulting approximately quarter

year. and For especially start Jabil's strength quarter when nice me, for results with with the XXXX. the outlook the diversification our the these income, illustrate I'm further and paired the balance of pleased fiscal to of

EMS detail current which prepared more results as like such team remarks. hand, to a print Jabil's his EMS they their broad advancing Markets driving of our a starting serve methods end now in EMS provide markets. hold. will range our X.X. around Forbes industrial, retail, and segment. during automotive, deep short, is customary, telecom day transformation, I'd deliberate networking the address As the energy, storage. to has business pivot key progressive Clearly, and know-how at with towards and and excellence the we semi-cap this is as team businesses, refer EMS out. A what proposition leverages equipment, engineering data transformation in is element In higher-margin day value as taken our domain of

around. for job growth an good performing the plan, Our operating seeing news X.X% to approach margins It's while outstanding all done year-on-year. core team has X% of revenue way showing year, the

story. play the year XXXX, Examples packaging. packaging innovation. squarely health as material solutions through undergoing and for the Both true high-growth and starting these feel the I fully Consumer care about two health consumer health intelligent fiscal good of Next, areas These packaging create of our through across we as both to reliable move businesses XX% disruption the a to packaging technologies our per XX% Jabil's see of convergence in affordable rate to yet businesses. grow digital new continue to teams our outlook with health DMS care a of specialized the of disruption. relevant and to care our demand and I'll examples teams urgent testament being segment, care businesses use at being and they

certainly let's remaining not Point least, but the sector talk within DMS Green business. segment, Lastly, about our commercial Jabil's

program complicated team back successfully first at processes while cost navigating at the demonstrating good Looking extreme quarter, ramps, controls, our supported and execution scale. numerous

our and now and months, diversified seeing my intricate second XX hardware the in resulting diversified, Point concluding an and we've for to range comments minutes a becoming complement I'll our of highlighted in a In automation As directly expertise, our address precision now as required, specific and solutions mechanics within to with Point quarter the Green assembly take platforms. more technologies few at wheelhouse. is business Green more starting an income enterprise are and Jabil's the company level, which integral guidance. more past generated across more we're wider business,

fiscal believe, in for of back Our a $X.XX neighborhood quarter XQ another suggests of grow indexed XXXX to the the XX% be of XXXX. a very to result, half a when year. first fiscal half second to core would a earnings growth half will of and fiscal year-on-year the we XXXX. EPS share I for fiscal EPS guidance XX% The the Moreover, against year-on-year quarter, XX% that solid quarter core year complete strong core which anticipate

repurchases just heavily billion in flow sense cash digital the $X.X we see purpose, and material this platforms, XXXX. future, fiscal a year of focus investments complete their remains to we're XXXX north revenue EPS window, years where year XXXX, to for of our time our areas rate three-year of planned our XX% XX% view cumulative year a Jabil's sciences, through These name over belief a year, aperture of underpinning what of year from by belief per for core XX% successful, to expand a to framework, two XXXX fiscal the Again, earnings automation fiscal and earnings, few. leadership If period. growth robotics, with of time time from compounded fiscal by various this success, all growth return flows XXXX. encompassing year return for and three-year our operations and is of a projected horizon share $X cash steadfast our remain commitment year. encouraging: manufacturing, a widen on and of we fiscal growth highly to XXXX X% to investing team dividends of X% per investing As end from executed are and on we to target billion our year to when additive in top fiscal fiscal through implies this, capital way two-year that of stock the and core shareholders we On year,

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diluted million, I'd restructuring GAAP ask X.X% was related to for was GAAP per on Thank you, Good earnings X, billion, $XXX was review with I'll of results. $X.X quarter. GAAP share growth Slide operating intangibles, basis. XXXX diluted $XXX to share where $X.XX. first million. revenue. were of Net of $XX represented was quarter and per million, the of for afternoon, income operating Mark. Core income quarter a our earnings turn and first the revenue fiscal X% net you year-over-year amortization Core charges, stock-based interruption, net business income, excluding the $X.XX compensation, everyone.

year-over-year to basis with X, revenue. billion, and turning XX% Now first a was line our segments. of was of segment quarter the Revenue from Slide I'll company quarter Services in discuss This Diversified income on total XX% Operating for X.X%. an represented guidance. previous increase our $X.X Manufacturing

for income fiscal year-over-year expenditures first on full basis Services year segment our this expectations of revenue Net X% million. totaled of increase X%. Net company was Manufacturing was XX% expenditures quarter $X.X capital revenue. Electronics billion, with for of $XXX represented the Operating previous track for total and $XXX a Our million. segment the fiscal remain capital an on

for As to were excess operations Cash expansion cash $XX by from million. was as anticipated, $X in fiscal of characterized result, our full of continue billion. capital used in working quarter year the flows first and flows be a operations expected

on million, an year-over-year revenue. a for invested the Core representing capital return some was of basis. approximately improvement XXX the X.X% quarter XX%, was $XXX for on basis Our quarter points core EBITDA of

quickly cash were balances end capital our million. were Our return focus. levels This remains address at like of Xx, total $XXX framework the debt a I'd to to EBITDA key quarter while framework. the

remains price share of totaling via At the $XX framework, Our since from operations million. repurchased track. $X outstanding the cash a million of inception an $XX.XX, first repurchases $XXX $XXX and return to we've of at quarter, on share million on repurchase much repurchases, were of remains end authorization. average plans our quarter, dividends maximum the our the to million. shares flows capital billion, In XX.X XX% stock very return current up And of

our restructuring Turning to plan.

remains Our track. restructuring activity on

this We of of remain this During million $XX commencing approximately fiscal of track associated million to conclusion approximately anticipate with million full to XXXX, and we XXXX. fully charges this be fiscal $XX recorded the and during savings realized $XX to associated plan with million $XX on plan activity. quarter, continues

our to in Rico. operations Puerto Turning

As first earnings activity operational that I'm we by to Ongoing quarter, proceeds. operations Puerto quarter, limited Hurricane pleased call, taking Rico continue net to being million place. some and and the recovery see in continue, advise repair discussed damage result we insurance I of and $X our of recorded recovery activities Maria. in on our September late first the significant saw as charges a cost In of offset we suffered

continue approximately damage, of increase Electronics found to quarter second on our on expect I'd basis fiscal and during segment Slide expected billion, to proceeds be XX% X. all to majority such now The be can fiscal insurance revenue Manufacturing to turn outlook, revenue full await XXXX the while we Services segment costs to billion. from assessments $X.X year. to We Manufacturing year-over-year recovered the basis, on to approximately final of like a increase Diversified X% Services $X.X expected year-over-year is to a is which

be and half earnings share. be quarter X%. per rate And be to earnings of billion per in range in XX%. to to finally, the on like The be to to to of to $X.XX Core per for in million range back million, $X.XX We share to $XXX fiscal range the the Thank second of expect be estimated to the to the the $X.XX you, And core of to estimated billion income. almost estimated basis. midpoint earnings increase be $XXX tax the XX% $X.XX of diluted in second on now and X.X% of XX%. revenue rate $X.XX the in is a to share, forecasted current to call second diluted hand is in share is operating per total quarter of expected operating on of year year estimated the the to the thus, of Beth. the based range range XX% were full the levels year-over-year be I'd GAAP with estimated $X.XX core the in XX% company of a to is margin in the an range range Core to income or

Forbes. Thanks,

be begin As product we not session, to will like to customer I in any of able fashion, our address questions. call participants our or remind specific Q&A would that, all customary we

ready cooperation Q&A Operator, for So, thank advance. we're your for the much very you session. in

of Certainly Raymond line the James. [Operator Adam question first Tindle Instructions] comes of Your

and thanks good Okay evening.

I thinking to weights seems in wanted XXXX last on Maybe of first this shape year. fiscal imply linear. total first in start some terms It about was half because of a Just the there EPS. half dollars to just this year, year last similar as I you're of And guidance. hope of think, if profit cadence your about of XX% second versus we be year us year, total how versus the think last last little more think came about EPS help half might a understand DMS bit year percentage that

any first So, second half? half cadence versus comments Thanks. on of the

Hi, Adam, thanks for the question.

you're So, segments. company if I one know of whole speaking the solely don't the or for

I don't was XXXX, fiscal right, as suggested about $XXX first year remember and I year today. think, I first million, if but over stronger, half hit looked a - exact in bit we half this you up and $XXX think, in guidance profits, if the numbers, our was quite million, the

XXXX you be of up like, second to second if also, ballpark extrapolate the looks half first half, in of XX%, the kind $X.XX, the XX%. Again, then, of half half of out half second what second and think, I to kind So, to first back be half to of will will up take XXXX. XXXX XXXX about half probably

Okay. also, Mark, the I to wanted understand helpful. two-year to program. That's on return I program. capital committed ask the you're return

You thus certainly far. delivered

You've also growth opportunities ahead. exciting outlined some

cash? beyond think how when fiscal between returning balance thinking this are these you you XXXX, new areas the investing in ends, the about as commitment So, versus

a additional investors. required, through the is as you in the make I'm to cash two-plus the have And the or like did enough me priority, So, always we the then, in flows X call, either what put of look think in a of might plan cash XXXX, flows, with board, for kind March both on XXXX we we felt the June to XXXX. when so we in like returns return flow around June I detail place We'll year, our and amount Number still bullish substantial January we expect over and meeting, investing, board board conversations our call because and on can years, year we this and had upcoming meeting. fiscal cash move investments of which and capital color April -

Okay. CapEx the XXXX, million higher talking about annualized bit $XXX a before, that. And but to think neighborhood of way fiscal $XXX you XXXX it's just the to for still in think, million, about I fiscal CapEx? little were clarify, than right Is

targeting. year. the similar pattern Hi, quarter, A Adam, this bit is heavier where following in Forbes. but little is Yes. it's $XXX we're a first last million to

So, $XXX million.

overall operational I just expectations also cash a in XXXX add, billion generate outlined about XXXX. at I'd flow Analyst XXXX, just of what flows, the think, our terms we of over fiscal over Day, cash year was year ago, and $X.X

still play. that's much very in So

to think support plenty forward cash and I of move have returns investments of as for liquidity, generation we growth. So, here both plenty we shareholder

Got you. it. Thank

UBS. Your next line Steve question the Milunovich, comes of

deliver our speak and How new casings. Milunovich. efforts is ask for Steve there. the This to maybe about diversify could checks, want Venkatesh to Thanks. Tejas competition to you? In And hear you Green diversification on I then, Point the to there? are of supply Asian constantly efforts your we chain concerned

about the concerned competition, been last but years. always have for We're XX we

diversification. an Green technologies And the in know. just you careful So I and remarks, our awfully of fiction. my whole that's in of across - business, and terms company. don't kind platform. Point but and of I try that's hear, words in to kind we're the hardware what prepared I'd products as differentiate maybe good used, I be of different kind in job doing across said But from fact think forget and I I

And well? across And customers as customers? new

Yes.

customers sure. for New

EMS strength there. a this could you as about lot There's quarter? up, what And Okay. drove in in talk a follow

would QX of had in revenue. of We we for I weakness EMS had op be terms in suggest that good in would we strength thought slight EMS to range terms Well, QX. in X.X% X.X% margins.

them. XXX-plus cover X.X, large inside and I to as heard was I my lot think don't markets moving and prepared printed all we've I a of markets, businesses end customers. didn't parts and of got of encapsulate remarks, of know, we end number and probably, that EMS you the due the in a But a

had basis with of is op automotive, are see pleased points, off energy, where to not million, $X And areas really industrial. would the quarter. by transitions, was income maybe that we I areas near-term concerning. which overall, overly of lot of say XX product ramps. product and So We a semi-cap equipment, continue areas strength XX, various

Your Bank next Lynch. line the question Merrill America comes from Bhattacharya, of Ruplu of

questions. for Thanks taking Hi. my

talked last past? an the Mark, think said on years. XX%. XX% Is what from think, care. is question I you first you to The said growth health XX% quarter I in that had packaging over and next acceleration the about you three

So, are X% And faster health the you than you to can in and within packaging range have X% the well that growing in margins for space? you on care they then, comment revenues Are that the thought? also DMS?

Thanks for question. the

be inclusive in on at to fiscal CAGR. XXXX, growing say, three commented I've sure XX% of, and see just from, through say, care year we So, of XXXX year call, fiscal is we rate clarify, that this packaging the what last a a health calls,

I think through strength business, positioned. remarks we a that of And I overall confidence - my minutes think few the to again, XX%, those be it's and ago, of well the the XXXX. both it XX% just will prepared I in of year to we disruption said fiscal that in have continue businesses was and very

- we some be businesses and point, those at at belief terms margins, more point, would sectors. or just just to as material, might continue In my we packaging those be that health as break care don't of out this we break out and more

that. for thanks on Okay, the color

When the Is quarter cost line it overall to in that the next on little the there to guide get margins you quarter, - a the related be next imply challenges look quarter? Any are margins bit You would that DMS helpful. color said your this much to year. the on for would EMS weaker. at the September pretty we is are margins DMS had X%

read wouldn't about much that. something EMS too I said approaching In I prepared remarks, I No. into think my X%.

we're good for fiscal for in shape pretty whole X.X%, So, year, XXXX. I the think hit year X% to the

call If QX really close we would this guided margin. percentages. kind I XXXX guided very last op about to be XXXX XXXX on our than but it specific of of of about we've We're to I haven't slightly versus line terms you guide, envision revenue, of about in XXXX QX But top I seeing stronger but the growing that. line talk EMS of much year-on-year revenue bottom too didn't call, kind X%. talked maybe take

of I shape similar think, year, be and today, to revenue closer would would grow to and still the the I holds. said year X.X%, last that

quarter. Okay, That's rate guided think that. the me, for XX% I color versus how last tax this for happening year? for for Forbes, XX% for full tax we think should question on the the guide thanks on rate quarter for Anything the you've rate? about And to the next And helpful. tax

Yes.

full model to I'd ask the type for year, XX% you rate. Ruplu, So,

dissimilar in of shift bit than seeing we're year. I the I mix different the What at areas the is ago. a So quarter-by-quarter, from said not XX advantaged start little days what to of tax a expected earnings

you'll to second in half QX, XX% So, then the of the full-year. come at up see for averaging in XX% and out back XX%, the year, that XX% it

the quarter. congrats thanks Okay, on and

you. Thank

of question Research. Cross from Steven line Fox, the next Your comes

mentioned was And provide a your quick if you in are you follow-up. remarks, Hi, that? good some growth there by Nypro. wondering can specialized had about, more I in any prepared exactly meant talk you'd and Mark, Is bit solutions a what I that then, about you color helping other afternoon. CPS little

the around certainly and certainly digital running packaging It's some we're with sciences, health factories, it's way platforms material sensors. the around It's around certainly the both creating. we're it's around that and Well, certainly care.

of through, one are where health the a good overall about area on news, bit if again, kind say maybe that health leans macro think kind a disruption, that is adamant of a the is our cost are people at just better our our we would observations care combine Steve, I I going wellness our And what much a perfectly basis with do you services into for and of capabilities fair structure point. a solutions. what living care price that

we're On seeing, of side, a lot the again, going packaging disruption on.

and packaging space, favor somebody the that's large package acquiring you think way everything. of you and again, If of of I looks, into the do what the exterior in shape really coming the the retail well. about then, are Amazon about the we package, to think like package, just the Millennials really, think, how changing, the protection about Intelligent all

So certainly and still X.X been pretty bullish And the the hopefully pretty in XXXX. hold X, we holds last banging fiscal year we've fiscal that's drum for will XXXX two years, hard areas. today, think and again, again, those and through through

EMS quick really it's And bit then, you quarter. you're quarter. EMS it? little little ask during this, disappointment as nothing to and That's clear? so I on right unusual slight But the Great. helpful. there, way last Is that Is a embarrassed bit in was the since bullish that the up, look to margins just It out that margins, follow anything a specifically. the at a saying here, little call bit just wouldn't was a the

of of million, for up not kind wouldn't to it looking shape $X make $X million, in worry shake year. the holistically, good I but and that. at of all light that million, million, It's is Yes. and if we $X about $X it business,

thanks Okay, so much.

of Your Sheerin, next Stifel. question Matt from comes line the

Yes, thanks afternoon. good and

for know year-over-year. look or XX% better historically. guidance on there's up if DMS you going the regarding product cycle now. question a than implies Just I That seasonality right so And

Green Point, is figure you in out sets. or about, across diversification particularly opportunities you're much how of Just where seeing product cycles trying to that due that customers the specific talked at product to

Yes.

the and part launches, think combination staggered historically as change and in has in a diversification. a other then, change of program that in what that maybe it's of seasonality parts overall been a I as the care maybe kind health packaging, So, - well business, of of is

it and all I is is the if business three maybe investment I So, the for across so DMS frustrating and gets to think the compare it's I today, this - just cuts it strength, shaped overall of today, four over areas. and looks the well years business, two what the just because content business, changed about kind of two it's or it hard to ago as that and the think think will change of kind it's to significantly, even even The years. DMS way tricky try community, our it's as business, more next

helpful. And Forbes. just Okay. a follow-up for That's

Regarding assumption Does of guidance or the roughly that million the $XXX in $X.XX repurchases? in include EPS XXXX. remaining so for fiscal share buyback, the or for

It does, Matt. Yes.

that by consumed Assume end is the that, August. $XXX million of

great. Thanks and Okay, lot, a holidays. happy

Thank you.

Thanks Matt.

question RBC comes Amit next Capital. the line of Your Daryanani, from

of Thanks guess is DMS guys. a Thanks guys One, than to chain, seasonality less A at quarter. talked follow-up one you kind on our me. down about companies out lot. guide question The of lot typically my implying are that taking Matt's it maybe for pushed what Apple is. question. have Feb exposure I in getting Big for for the supply two I guess,

For doesn't what you seem in from Mark, see you a do far? the of be mean, patterns Or there's to down will what because case more that historical point maybe, out? May the be think that numbers push DMS quarter are where, I seasonal so guys than

continues It within, say, and more then, to Again, our would guide sequentially look become you end internally, our changes overall compare a decline QX of mobility then, suggest to again, external XXXX, of the - and customers? the some Well, space, on XXXX, business you data, the that DMS shape through got What lifestyle markets? what? QX What our decline, we're of consumer about What and to of And and about you the care when we're both true. on, encapsulate products QX to markets. end think think that to according our XXXX business, think, you you're XXXX to of based does again, health doing continues think diversification, if I I The to smaller that's QX diversified. market packaging. right. much you're change products? data just market what space when talking

again, compare getting it's just hate kind to So of I but it's - to say - year-on-year. and it's this, It's true. harder just harder

enough. EMS Fair I just shift side, guess, gears. on to the

the guess X% a in Feb. mentioned way it, of in and to, November op ran call will times, margins You couple math the was EMS go I you from X.X%

I not mistaken. if think said flat it I'm be you will year-over-year,

margin Just you to are understand, a to sequential I guys, that quarter, help think how Feb for Because go expansion? in going that don't on get me do the up dramatically basis. revenues you

So, basis the when enabled the there? isn't XX what points of tailwind revenue margin XX, expansion,

in I'll think head. math the my try through to

So, stick with me.

printed is X.X% I for we'd of X% what think EMS similar so we said just line. in margin I XXXX, op QX. on be to at would that be QX XXXX the looking X.X%,

in QX XXXX. you revenue If to what we revenue terms the of in EMS, for looks awfully for familiar compare just said the guide of our QX of XXXX

imagine, So our large, of moving business. $XX terms of can in $XX lot cost billion There's running billion-plus, you investments. and as a teams this again, parts

So that's is. it all

to up bullishness And X%. business, this ago, X.X% of the the we're be I of to back the terms that margins. at going bouncing against right we running were X, In strength, X.X it X%, years business year bring

numbers So very quarter-on-quarter into again, I too That for wouldn't the healthy. business read the year. remains much

Got it. I'll And the just a final one, cede floor.

do tax a at rate there the if rate of think think to point? tax could structural through? like, the potential reform bill Is what how gets this we this look way with about tax passage Forbes, your about

Yes.

the to do corporate we XX%. impact our not We're changes a on rate, the taxpayer. Most suggesting see if these So little of country. operations big U.S. structurally, are of out

structural no So, there. change

look when is at basis. lies, opportunity on cash the a where think, we repatriation I forward-looking

territorial a favor and that all of in So clearly, system.

this And so hopefully, the coming we'll about hear in weeks. more

Thank you.

comes of line question the Citi. next from Suva, Jim Your

Thanks so much.

and lot a the details of gave on You questions. presentation

looks your slides not is end revenues you came It I And EMS Can and any it's correctly, like for the DMS, kind I strength outlook interesting note, you read So, it like had switch of then, quarter on November markets EMS. or better-than-expected the about where in around rather quarter think, with, I'll year-over-year. up on a X%. February guess give looks to up focus but from? for were I insights the what if X%

of quarter. us kind Can the help deceleration you bit of a a So, of strength deceleration? from a bridge a this bit to

Jim. Sure,

little always, been number again, last before, put both EMS I've in growth Took commentary kind buckets. rate, as bit bullish of on up many about If parts So revenue the I bottom the XX-day couple calls, line. a hard, of for top the this moving so and to higher. think pretty said

line X%. So, EMS I would think around last up be call I top said that

think, in said today's closer I X.X%. might I that be prepared remarks, to

half will be the half, first look aggregate year be first would XXXX half. that I up EMS were And think versus the of business of first little in well. together, terms around for margin just the strength I of which think the up, maybe, all I as XXXX the would just and revenue. And would of of up, again, revenue a drove same. And product compared XXXX, XQ performed of a In say, QX up at the was half about then, a we over extremely And then, XXXX. XXXX take QX I you're up for imagine, transitions, that it points X% I whole. is lot marginally about I to you XXXX, think, to half of back the X%. correct, be X.X% on first But all XX, to flat. XX of a basis off, reason QX if Again, XQ, ramps, the blend it's will of It's kind EMS

bit semi-cap X I X across In industrial terms or commented so add but other I to and modest businesses, could seeing automotive energy fairly Certainly, sectors our we're on of of it's where then earlier. that's that, a and right. equipment, strength, some

strengths of I the basis. some think if at on I it, coming an from, look annual

for and much holidays. so Thanks all the details happy

Yeah, you Jim. as well

next Your the Deutsche Bank. Sherri question line comes Scribner, of

trends cloud-related storage Adrienne the the for as taking seeing you it's your comment Hi, I well legacy for trends was could if question. EMS Colby segment, you're Thanks in server and business? Sherri. within as wondering, on the business in

some across platforms. of say would of seeing I we're that to areas neutral kind storage softness

data that's certainly legacy storage, cloud in storage, of helpful. stronger kind overall if the data of than of terms and cloud areas In kind hyper of

the up, new Sky follow I It is. think one in Italy. a talked about one and Singapore quarter, as in Thanks. innovations, wondering, two opening I you was And in Blue

how expectations Just wondering centers, focusing - have. how areas the the on? planning costs What be many talk you're for if startup are? And of your those centers strategy will these could about to that you terms you're in

a what it into to San whether - - whether That call in Center business geographies, I is, what in get say be different for in Innovation that's won't reaction a Sky all be opened we're had so would such great kind as of Jose. acceptance various that Singapore. have is our would San the Probably doing globe we of corporation, Italy, Spain, the detail. for Blue that development We sectors up that Jose. in working centers it kind I

San So, Jose. the whole main customers, the innovation captures kind holistically that is of theme Center of the company for Blue and pedigree the Sky

centers are labs, the Sky we'd business. what work across as characterize of sectors and doing Blue they're really working other, more various The the that cuts R&D

you. Thank

You’re welcome.

of & Hannan, question Company. Needham the Your comes next from Sean line

Nice on thanks. evening folks. the work results and here. Yeah, the Good guide

So, me. really question one just for

Mark, had that, Green think referenced some in expansion business. Point the I that you of services you had

wanted services I expand the the is a see nature there of of So, application. way you can if upon and to those nature

try. I'll

Green the Sean, remarks, in prepared DMS. think my rest differentiating the So, that reason Point from put is I of I

Jabil. that's lot but a towards we in different mechanics, to a machining, Point, end intricate more But conversation we we I across mechanics, coming the history as of think precision weighted that markets mechanics expert to being so work, a that's as customers, long, across assembly product around and those complement maybe and We're the good seeing there very assembly Point Green complementing long precision good within largely us. good is a we platforms, and expand complicated - intricate different really at precision mechanics, expand specific, story for is expand we're going of of other Green heavily for as have across and true. on two each and be very, lot

Okay.

standpoint, and relevance say, into types that from expansion markets products? So, markets in bit of handset other though, of a or little expand an to, terms the application further you can on let's more

Yes.

So, I'll you just some give hypotheticals.

what's won't you and You what's and a handsets. anything about forget the with about optics package a density fact on than other also going handset I augmented of Consumer the the there say on about have that we forget reality, reality, mobile people happening whole products and a think play in whole space, handset space. - and out know cameras, then that - the than our we lot more and you have But virtual there's other the about think with we lifestyle miniaturization of kind business, people with

give of will in. So that different areas of an you the we're kind playing idea

you. Thank helpful. very That’s

great a holiday. Have

of next Your line Delaney, the Mark comes Sachs. Goldman question

for and I talked I to Mark, first Thanks a afternoon. question, little know trying guess, maybe, environment. terms you're bit GDP-type good maybe you EMS just geographically? Or questions. in what get improved if differences seeing the seeing in trends. broader higher-level you're a any macroeconomic what seen perspective, you global an pickup. taking Yes, But kind of of talk, industrial some could of you about just have

Just curious your thoughts there. of

at really, We're our that. thing extrapolate One $X.XX, might something it probably feel year earnings, the about we $X.XX, $X.XX, whatever when year, about number whether fact Mark. that. the GDP. basis global that delivered I or X.X, the and is global is, was, Xx go I really to X, last at feel for whatever X.X, $X.XX, good $X.XX, off Sure, really than if good greater outlook this year that being our I next about feel X.X, Xx GDP you of be, good

travels, in the on in Europe, U.S. kind and I of we're across the some of around I macro, would a traveling terms got feels we've getting better. that as would overall economy around say lot, road the say it like maybe not board, is In long slow certainly, declining. legacy little just the are to Japan, maybe the a tube technologies and like things of better. feel a slightly in that, bit parts little businesses that But our across based things

what this next right. outstanding, anything upward in wouldn't couple the a with I happens maybe about think glide feels years step of we'll significant - don't of I an up, tax over path I slight plan. function but great. and think headwinds see years, be last some number because couple would would our of back And of next wind the the if that interesting be we've little been happens, that getting for years fighting a think

up That's just context follow-up were on but was trying helpful. I I just some up question, inventory days you why provide know could think - or and inventory. increased. if dollars a and maybe similar, for think I I inventory had it

Yes.

You're million, correct. reason. particular It $XXX million. was up, No I think, $XXX

season, we got It's Just if our then sales i.e., you aligns November think period. and quarter, like second so on that quarter pull-through end move quarters you see with and Consumer will, way calendar untypical. buying in about the as itself with contract quarter the if and we'll the not through you in December correct such still

been parts I think bit. starting at the - we've back and to other component I - tight. see look market you of Mark, at thing a everything, the have other there, kind just you loosen - if little think thing certain step if the that of up look been We

QX just sure the to well. So, quite made be but be back we look buys our is of you knock at some half might they'll you up XXXX, bit And what continuity up the on XXXX, supply, and index whole of wood, look bit. versus revenue be as out a had we you a XXXX in across a to relative take the kind early of of year that company if little of to of back the half QX revenues

a at that the little all think I So, into moment. inventories fluffy bit plays being

I just with mean, and conversations of that customers? guys Thank contingency guys And holidays. any and negotiation what have you you third hasn't happy planning? while, ask about been I one. curious could sort your for any I Just do kind know you, do a much, a has If NAFTA would under there. been of renewed. very

and let's Mark. lot and That see I Thanks - that It would be what a becomes see if companies. issue no. At - for this we'll real. industries lot wait a of an point, of happens just there.

on of around how goes. that So, moment, going at a real conversation we'll lot that. the see there's But not

in next the line comes Your Paul of Coster, JPMorgan. question

my This is Paul Thanks for question. Chung on for taking Coster.

So, just up quick follow Point. Green one on

So, move you ramp up given behind the the you, margins? through impact are how And any you on to over benefits expect year? quantify next product respective can as carries now And scale costs the cycle? we that

across ramp cost relatively September. of balance think us, were and to the and I the and Green shape part had in August that July, we and the say behind talked of and both going would I issues we addressed year. some about of we're largely DMS for back all good the Those Point

after Okay. how the your we - big step year? should also, And up comp for about in for rest just stock how the quickly then, XQ should on, restructuring full think of charges year the the and,

of Yes, let say, $XX $XX that I the first. full second the the million for half so expectations. most million. current million expect QX, year, Probably, be me $XX handle the about we would charges in would year, restructuring of on based

million move second fiscal million, that quarter, $XX in normal the cadence $XX quarter. stock more will comp, terms around back to of a In of starting

you. Thank

reached Walters our to Beth like time remarks. allotted turn back for the over floor We any now would closing I to have for questions.

clearly, much, happy everyone, the to out any questions so reach comments us feel Please season. free And you. you and of enjoy I'll today. the Thank Mark to the for follow-up company. of reiterate, outlook on just Forbes' financial on or everyone and joining the Thank with holidays results,

Thank you in participating today's for conference.

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