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Jabil Q4 Earnings Top Estimates Despite Weakness in Multiple Verticals
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Jabil, Inc. (JBL - Free Report) reported healthy fourth-quarter fiscal 2024 results, with both the bottom and top lines surpassing the Zacks Consensus Estimate. However, weakness in multiple end markets, including networking, storage, digital print, retail, 5G wireless & cloud, led to a revenue contraction year over year. Growth in AI-powered data center is a tailwind.
Net Income
Net income on a GAAP basis in the quarter was $138 million or $1.18 per share compared with $155 million or $1.15 per share in the prior-year quarter. The decline is primarily attributed to top-line contraction year over year.
Non-GAAP net income in the reported quarter was $270 million or $2.30 per share compared with $328 million or $2.45 per share in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate of $2.23.
In fiscal 2024, on a GAAP basis, the company generated a net income of $1.388 billion or $11.17 per share compared with $818 million or $6.02 per share in the previous year. Non-GAAP net income was $1.056 billion or $8.49 per share compared with $1.172 billion or $8.63 per share in 2023.
Net sales during the quarter decreased to $6.96 billion from $8.45 billion reported in the year-ago quarter. The top line beat the consensus estimate of $6.55 billion. Demand softness in several end markets, including 5G wireless, cloud, industrial & semi-cap, digital print & retail, networking & storage and connected devices, impeded the top line.
In fiscal 2024, the company generated $28.9 billion in revenues, down from $34.7 billion in 2023.
Net sales from Diversified Manufacturing Services declined 22% year over year. Electronics Manufacturing Services were down 13% compared to the prior-year quarter.
Management has restructured its businesses into three different segments to optimize its operations. The segments are Regulated Industries, Intelligent Infrastructure and Connected Living & Digital Commerce.
The Regulated Industries segment contributed $3.04 billion in revenues, while net sales from the Intelligent Infrastructure segment totaled $2.31 billion. Revenues from the Connected Living & Digital Commerce segment stood at $1.62 billion.
Other Details
Gross profit was $663 million compared with $766 million in the year-ago quarter. Non-GAAP operating income aggregated $401 million, down from $477 million in the year-ago period. Non-GAAP operating margin was 5.8% compared with 5.6% in the year ago quarter.
Cash Flow & Liquidity
In fiscal 2024, Jabil generated $1.71 billion of net cash from operating activities compared with $1.73 billion in the previous year. As of Aug. 31, 2024, the company had $2.2 billion in cash and cash equivalents, with $2.88 billion of notes payable and long-term debt compared to respective tallies of $1.8 billion and $2.875 billion in the prior year.
Outlook
For the first quarter of fiscal 2025, revenues are expected to be in the range of $6.3-$6.9 billion. Non-GAAP operating income is projected in the $304-$364 million range. Management estimates non-GAAP earnings per share within the band of $1.65-$2.05.
The company expects datacenter power and cooling, electric and hybrid vehicles, healthcare and pharmaceutical delivery solutions, semiconductor equipment and warehouse automation will be the key growth markets in the mid to long term.
Zacks Rank & Stocks to Consider
Jabil currently has a Zacks Rank #5 (Strong Sell).
In the last reported quarter, it delivered an earnings surprise of 8.25%. It is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center networks.
Ubiquiti Inc. (UI - Free Report) sports a Zacks Rank #1 at present. The company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises.
Its excellent global business model, which is flexible and adaptable to evolving changes in markets, helps it to beat challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved its UI’s visibility for future demand and inventory management techniques.
Workday Inc. (WDAY - Free Report) carries a Zacks Rank of 2 (Buy) at present. In the last reported quarter, it delivered an earnings surprise of 7.36%.
WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system that makes the process easier for organizations to provide analytical insights and decision support.
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Jabil Q4 Earnings Top Estimates Despite Weakness in Multiple Verticals
Jabil, Inc. (JBL - Free Report) reported healthy fourth-quarter fiscal 2024 results, with both the bottom and top lines surpassing the Zacks Consensus Estimate. However, weakness in multiple end markets, including networking, storage, digital print, retail, 5G wireless & cloud, led to a revenue contraction year over year. Growth in AI-powered data center is a tailwind.
Net Income
Net income on a GAAP basis in the quarter was $138 million or $1.18 per share compared with $155 million or $1.15 per share in the prior-year quarter. The decline is primarily attributed to top-line contraction year over year.
Non-GAAP net income in the reported quarter was $270 million or $2.30 per share compared with $328 million or $2.45 per share in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate of $2.23.
In fiscal 2024, on a GAAP basis, the company generated a net income of $1.388 billion or $11.17 per share compared with $818 million or $6.02 per share in the previous year. Non-GAAP net income was $1.056 billion or $8.49 per share compared with $1.172 billion or $8.63 per share in 2023.
Jabil, Inc. Price, Consensus and EPS Surprise
Jabil, Inc. price-consensus-eps-surprise-chart | Jabil, Inc. Quote
Revenues
Net sales during the quarter decreased to $6.96 billion from $8.45 billion reported in the year-ago quarter. The top line beat the consensus estimate of $6.55 billion. Demand softness in several end markets, including 5G wireless, cloud, industrial & semi-cap, digital print & retail, networking & storage and connected devices, impeded the top line.
In fiscal 2024, the company generated $28.9 billion in revenues, down from $34.7 billion in 2023.
Net sales from Diversified Manufacturing Services declined 22% year over year. Electronics Manufacturing Services were down 13% compared to the prior-year quarter.
Management has restructured its businesses into three different segments to optimize its operations. The segments are Regulated Industries, Intelligent Infrastructure and Connected Living & Digital Commerce.
The Regulated Industries segment contributed $3.04 billion in revenues, while net sales from the Intelligent Infrastructure segment totaled $2.31 billion. Revenues from the Connected Living & Digital Commerce segment stood at $1.62 billion.
Other Details
Gross profit was $663 million compared with $766 million in the year-ago quarter. Non-GAAP operating income aggregated $401 million, down from $477 million in the year-ago period. Non-GAAP operating margin was 5.8% compared with 5.6% in the year ago quarter.
Cash Flow & Liquidity
In fiscal 2024, Jabil generated $1.71 billion of net cash from operating activities compared with $1.73 billion in the previous year. As of Aug. 31, 2024, the company had $2.2 billion in cash and cash equivalents, with $2.88 billion of notes payable and long-term debt compared to respective tallies of $1.8 billion and $2.875 billion in the prior year.
Outlook
For the first quarter of fiscal 2025, revenues are expected to be in the range of $6.3-$6.9 billion. Non-GAAP operating income is projected in the $304-$364 million range. Management estimates non-GAAP earnings per share within the band of $1.65-$2.05.
The company expects datacenter power and cooling, electric and hybrid vehicles, healthcare and pharmaceutical delivery solutions, semiconductor equipment and warehouse automation will be the key growth markets in the mid to long term.
Zacks Rank & Stocks to Consider
Jabil currently has a Zacks Rank #5 (Strong Sell).
Arista Networks, Inc. (ANET - Free Report) sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last reported quarter, it delivered an earnings surprise of 8.25%. It is engaged in providing cloud networking solutions for data centers and cloud computing environments. The company offers 10/25/40/50/100 Gigabit Ethernet switches and routers optimized for next-generation data center networks.
Ubiquiti Inc. (UI - Free Report) sports a Zacks Rank #1 at present. The company offers a comprehensive portfolio of networking products and solutions for service providers and enterprises.
Its excellent global business model, which is flexible and adaptable to evolving changes in markets, helps it to beat challenges and maximize growth. The company’s effective management of its strong global network of more than 100 distributors and master resellers improved its UI’s visibility for future demand and inventory management techniques.
Workday Inc. (WDAY - Free Report) carries a Zacks Rank of 2 (Buy) at present. In the last reported quarter, it delivered an earnings surprise of 7.36%.
WDAY is a leading provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system that makes the process easier for organizations to provide analytical insights and decision support.