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Jabil (JBL - Free Report) reported fourth-quarter fiscal 2020 earnings of 98 cents per share, which beat the Zacks Consensus Estimate by 48.5% and increased 11.4% year over year.
Revenues increased 11.1% year over year to $7.3 billion and beat the Zacks Consensus Estimate by 16.7%.
Electronics Manufacturing Services (EMS) revenues accounted for 61% of total revenues and increased 8% year over year to $4.45 billion. Moreover, Diversified Manufacturing Services (DMS) revenues accounted for 39% of total revenues and improved 17% year over year to $2.85 billion.
Gross margin, on a GAAP basis, contracted 80 basis points (bps) year over year to 6.7%.
Core EBITDA margin contracted 60 bps on a year-over-year basis to 6%.
Operating expenses on a GAAP basis contracted 60 bps on a year-over-year basis to 4%. As a percentage of revenues, while selling, general and administrative (SG&A) expenses contracted 70 bps year over year to 3.5%, research & development (R&D) expenses remained unchanged on a year-over-year basis.
Non-GAAP core operating margin contracted 20 bps on a year-over-year basis to 3.5%.
Balance Sheet & Cash Flow
As of Aug 31, 2020, cash and cash equivalents were $1.39 billion compared with $763.3 million as of May 31, 2020.
In fourth-quarter fiscal 2020, Jabil repurchased approximately 763,000 million shares for $25 million, bringing total year-to-date repurchases to $215 million, as part of a two-year $600 million authorization announced in September 2019.
Guidance
For first-quarter fiscal 2021, Jabil expects total revenues between $6.7 billion and $7.3 billion.
DMS revenues are forecast to be $3.8 billion, up 1% year over year. EMS revenues are forecast to be $3.2 billion, down nearly 15% year over year.
Core non-GAAP operating income is estimated to be $295-$335 million. The company’s core earnings are expected between $1.15 and $1.35 per share on a non-GAAP basis.
For fiscal 2021, revenues are expected to be around $26.5 billion with expected core margin of 4%.
DMS segment revenues are expected to be $14 billion with expected core margin of 4.5% for fiscal 2021.
Further, EMS segment revenues are expected to be $12.5 billion with core margin projected to be 3.5%.
The company’s core earnings are expected to be $4 per share on a non-GAAP basis.
Adjusted free cash flow is expected to be more than $600 million.
Long-term earnings growth rate for Sanmina Corporation, Celestica and EPAM Systems is currently pegged at 12%, 25.6% and 15.6%, respectively.
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Jabil (JBL) Q4 Earnings Beat Estimates, Revenues Rise Y/Y
Jabil (JBL - Free Report) reported fourth-quarter fiscal 2020 earnings of 98 cents per share, which beat the Zacks Consensus Estimate by 48.5% and increased 11.4% year over year.
Revenues increased 11.1% year over year to $7.3 billion and beat the Zacks Consensus Estimate by 16.7%.
Jabil, Inc. Price, Consensus and EPS Surprise
Jabil, Inc. price-consensus-eps-surprise-chart | Jabil, Inc. Quote
Quarter Details
Electronics Manufacturing Services (EMS) revenues accounted for 61% of total revenues and increased 8% year over year to $4.45 billion. Moreover, Diversified Manufacturing Services (DMS) revenues accounted for 39% of total revenues and improved 17% year over year to $2.85 billion.
Gross margin, on a GAAP basis, contracted 80 basis points (bps) year over year to 6.7%.
Core EBITDA margin contracted 60 bps on a year-over-year basis to 6%.
Operating expenses on a GAAP basis contracted 60 bps on a year-over-year basis to 4%. As a percentage of revenues, while selling, general and administrative (SG&A) expenses contracted 70 bps year over year to 3.5%, research & development (R&D) expenses remained unchanged on a year-over-year basis.
Non-GAAP core operating margin contracted 20 bps on a year-over-year basis to 3.5%.
Balance Sheet & Cash Flow
As of Aug 31, 2020, cash and cash equivalents were $1.39 billion compared with $763.3 million as of May 31, 2020.
In fourth-quarter fiscal 2020, Jabil repurchased approximately 763,000 million shares for $25 million, bringing total year-to-date repurchases to $215 million, as part of a two-year $600 million authorization announced in September 2019.
Guidance
For first-quarter fiscal 2021, Jabil expects total revenues between $6.7 billion and $7.3 billion.
DMS revenues are forecast to be $3.8 billion, up 1% year over year. EMS revenues are forecast to be $3.2 billion, down nearly 15% year over year.
Core non-GAAP operating income is estimated to be $295-$335 million. The company’s core earnings are expected between $1.15 and $1.35 per share on a non-GAAP basis.
For fiscal 2021, revenues are expected to be around $26.5 billion with expected core margin of 4%.
DMS segment revenues are expected to be $14 billion with expected core margin of 4.5% for fiscal 2021.
Further, EMS segment revenues are expected to be $12.5 billion with core margin projected to be 3.5%.
The company’s core earnings are expected to be $4 per share on a non-GAAP basis.
Adjusted free cash flow is expected to be more than $600 million.
Zacks Rank & Stocks to Consider
Jabil currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector include Sanmina Corporation (SANM - Free Report) , which sports a Zacks Rank #1 (Strong Buy), and Celestica, Inc. (CLS - Free Report) and EPAM Systems, Inc. (EPAM - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Sanmina Corporation, Celestica and EPAM Systems is currently pegged at 12%, 25.6% and 15.6%, respectively.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>