Jabil posts record financial results, finalizes tax break with Pinellas County

Jabil, the biggest company in St. Petersburg, seems to have shaken off the financial impact of Covid-19.

The manufacturing services company reported what it said were record financial results for the three months ended Nov. 30, the first quarter of its fiscal year, and company leaders are projecting $27.5 billion in revenue for all of fiscal year 2021.

“Q1 overall gives us excellent momentum for what looks to be another outstanding year,” Mark Mondello, CEO, said during a conference call with analysts.

Mark Mondello, Jabil CEO

Revenue for Q1 2021 was $7.8 billion, up 4.4 percent from the same quarter a year ago, and net income was $200.4 million, or $1.31 a share, compared to $40.4 million or 26 cents a share in the year-ago quarter.

Jabil (NYSE: JBL) initially was hit hard by Covid-19 shutdowns in the spring, when it said it would trim its global workforce to prepare for the future. But Jabil experienced fewer Covid-related disruptions as the year went on and when it ended its fiscal year on Aug. 31, it said Covid expenses were lower than expected.

During Tuesday’s call, Mondello credited the company’s workers.

“The genesis of what we do for a living is we build stuff,” Mondello said in response to question about whether Jabil was getting more efficient with its manufacturing plants and equipment. “We a build a little bit of everything. We help support and partner to a few trillion dollars of market cap and what our operational team did, getting back to the questions about factory utilization and efficiencies through Covid, was miraculous. And we did that with a de minimus amount of Covid cases.”

Over-performance in the first quarter of FY 2021 was driven by three factors, said Michael Dastoor, chief financial officer. He cited a long-standing initiative to diversify the kinds of products Jabil manufactures. Several business lines performed better than expected, including healthcare, automotive and semi-cap, while mobility, connected devices and cloud products were in high demand and produced more revenue than anticipated. The company also reduced interest payments and taxes.

Jabil reported its earnings two days after the Pinellas County Board of County Commissioners finalized an agreement that gives the company a $530,000 tax break over the next decade. Commissioners voted in October to grant the tax exemption and the agreement approved Tuesday spells out the performance requirements Jabil must meet so it won’t have to pay ad valorem taxes on the increase in value at its new Innovation Center, a 40,000-square-foot facility at 10900 Roosevelt Blvd.

Jabil spent $11.7 million to renovate the facility, the former Tampa Bay Research Center. It is open and operating with 86 retained employees and 12 new workers, Mike Meidel, Pinellas County Economic Development director, told county commissioners.

“They are required to maintain that. We take an annual report on that every year. We track individuals by job title and hire date and we will know that those jobs were retained throughout the 10-year process,” Meidel said.

The Innovation Center is the first phase of a three-phase expansion plan that will result in a newly built corporate headquarters for Jabil.

Jabil is one of the largest employers in the county, with 1,800 workers at an average wage that exceeds $70,000 per worker for a total $126 million payroll every year, Meidel said.