Coronavirus pinches Jabil
Jabil Inc., the largest company headquartered in St. Petersburg, said its financial performance for the current fiscal period will be impacted by the coronavirus outbreak.
Jabil (NYSE: JBL) is a manufacturing solutions company with about 62 percent of its manufacturing operations in Asia, including a “significant portion” of its operations in China, the company’s most recent annual report said.
The company’s factories have been adversely impacted by the virus and are now running at roughly 65 percent to 70 percent capacity, Mark Mondello, CEO, said in a statement.
“Our first priority is the overall safety of our people. To this end, we’ve instituted broad testing and quarantine protocols to support those who are on-site at our factories. In addition, we remain in close contact with our employees who’ve been unable to return to work due to ongoing travel restrictions,” Mondello said.
Jabil said in December it expected $6 billion to $6.7 billion in revenue and operating income ranging from $70 million to $189 million for the current fiscal year second quarter, which ends Feb. 29. In the statement issued Tuesday morning, the company now says Q2 2020 results will be negatively impacted. Mondello said Jabil would provide updated information during the earnings call for the second quarter, which is currently planned for mid-March.
Jabil’s stock price fell in pre-market trading Tuesday, but rebounded shortly after the market opened and was trading at about $36 a share at 10 a.m.
Jabil’s largest customer is Apple Inc. (Nasdaq: AAPL). Apple last week said worldwide iPhone supply would be temporarily constrained because of the virus.
Mondello indicated Jabil was prepared for the impact.
“After a stronger than anticipated start to the fiscal quarter, we’re now in a position to ‘read and react’ to this very dynamic labor and supply chain situation. The actions taken by our teams have been admirable, to say the least,” he said. “We are intensely focused on the well-being of our employees, as we work diligently to clear down product backlog, while serving our many customers.”
Another Pinellas County company, Superior Group of Companies Inc. (Nasdaq: SGC), also has reported fallout from the coronavirus. The company, based in Seminole, sources products from China for use in uniform manufacturing and promotional products
“We have begun to be negatively affected by actions taken to address and limit the spread of the coronavirus, such as travel restrictions and limitations affecting the supply of labor and the movement of raw materials and finished products. If available manufacturing capacity is reduced as a result of the coronavirus, it could negatively affect the timely supply and pricing of finished products,” Superior said in its annual report.
While the virus originated in China, it’s been spreading to other countries, including South Korea, Italy and Iran, USA Today reported. Some economists are concerned that as the virus spreads, it raises the risk of recession in the United States, according to the report.
Companies increasingly have mentioned coronavirus as a potential risk to their businesses in recent filings with the Securities and Exchange Commission. Among those citing the virus as a potential risk are Conmed Corp. (NYSE: CNMD), a medical technology company based in Utica, New York and with a 278,000-square-foot plant in Largo.
