Jabil Inc (JBL) Reports Q1 Fiscal Year 2024 Results Amid Demand Softening

• Jabil Inc (NYSE:JBL) announces Q1 fiscal year 2024 results with a focus on core margin and EPS growth.

• Company reiterates its amended fiscal year 2024 financial outlook, expecting over $9.00 in core diluted EPS.

• Despite a decrease in net revenue year-over-year, Jabil maintains a positive adjusted free cash flow forecast.

On December 14, 2023, Jabil Inc (NYSE:JBL) released its 8-K filing, detailing its financial performance for the first quarter of fiscal year 2024. Amid a broad-based softening in demand, the company reported a decline in net revenue compared to the previous year. However, Jabil Inc (NYSE:JBL) managed to achieve growth in core margins and core earnings per share (EPS), demonstrating resilience in its operational efficiency.

Financial Highlights and Outlook

For the first quarter of fiscal year 2024, Jabil Inc (NYSE:JBL) posted net revenue of $7.0 billion to $7.6 billion, with a U.S. GAAP operating income ranging from $216 million to $301 million. The company's core operating income, a non-GAAP measure, stood between $339 million and $399 million, while core diluted EPS was reported between $1.73 and $2.13.

Looking ahead, Jabil Inc (NYSE:JBL) has provided an updated outlook for fiscal year 2024, projecting net revenue of $31 billion and a core operating margin between 5.3% and 5.5%. The company anticipates core diluted EPS to exceed $9.00 and adjusted free cash flow to surpass $1 billion.

Income Statement and Balance Sheet Summary

The condensed consolidated statements of operations reveal a net revenue of $8.387 billion for the three months ended November 30, 2023, a decrease from the $9.635 billion reported in the same period last year. Despite this, Jabil Inc (NYSE:JBL) managed to increase its gross profit from $743 million to $775 million year-over-year. Operating income for the quarter was $303 million, compared to $362 million in the previous year.

The balance sheet shows that as of November 30, 2023, Jabil Inc (NYSE:JBL) had total assets of $19.414 billion, virtually unchanged from the $19.424 billion recorded at the end of August 2023. The company's cash and cash equivalents decreased slightly from $1.804 billion to $1.550 billion.

Cash Flow and Non-GAAP Measures

Jabil Inc (NYSE:JBL)'s cash flow statements indicate a net cash provided by operating activities of $448 million for the three months ended November 30, 2023. The company's investment in property, plant, and equipment totaled $288 million, while net cash used in financing activities amounted to $620 million, primarily due to payments toward debt agreements and the acquisition of treasury stock.

The reconciliation of U.S. GAAP financial results to non-GAAP measures shows a core operating income of $499 million for the quarter, up from $461 million in the prior year. Core earnings, another non-GAAP measure, were $343 million, and diluted core earnings per share stood at $2.60, compared to $2.31 in the previous year.

Company Commentary and Analysis

CEO Kenny Wilson commented on the results, stating,

Despite softer demand, the team delivered good year-over-year growth in core margins and core earnings per share."

This indicates that while Jabil Inc (NYSE:JBL) faced challenges in the market, its focus on operational efficiency and cost management has paid off, allowing the company to maintain profitability and cash flow in a difficult environment.

Overall, Jabil Inc (NYSE:JBL)'s first-quarter results reflect a company navigating market softness with strategic focus on core financial metrics. The company's ability to maintain a strong core operating income and a positive outlook for adjusted free cash flow suggests a robust underlying business model capable of weathering demand fluctuations.

Investors and potential GuruFocus.com members interested in Jabil Inc (NYSE:JBL)'s detailed financial data and future performance can access the full 8-K filing and stay updated on the company's progress through the fiscal year 2024.

Explore the complete 8-K earnings release (here) from Jabil Inc for further details.

This article first appeared on GuruFocus.