Jabil Inc (JBL) Reports Q2 Fiscal Year 2024 Results
Net Revenue: Q2 FY24 net revenue of $6.767 billion, a decrease from $8.134 billion in Q2 FY23.
Gross Profit: Gross profit for Q2 FY24 stood at $630 million compared to $661 million in the prior year.
Operating Income: Reported a substantial increase in operating income to $1.131 billion in Q2 FY24, primarily due to a gain from the divestiture of businesses.
Net Income: Net income attributable to Jabil Inc soared to $927 million or $7.31 per diluted share in Q2 FY24.
Core Operating Income: Non-GAAP core operating income was $338 million for the quarter.
Free Cash Flow: Adjusted free cash flow for the first half of FY24 was significantly positive, bolstered by proceeds from the divestiture of businesses.
Future Outlook: Jabil Inc projects core diluted EPS of $10.65 for FY25, indicating confidence in future margin expansion and earnings growth.
On March 15, 2024, Jabil Inc (NYSE:JBL) released its 8-K filing, detailing the financial results for the second quarter of fiscal year 2024. Jabil Inc, a leading manufacturing services and solutions provider, faced revenue headwinds this quarter but expects to maintain strong core operating margins and free cash flow for the fiscal year.
Company Overview
Jabil Inc is a global manufacturing behemoth that offers comprehensive electronics design, production, and product management services. The company operates through two segments: Electronics Manufacturing Services (EMS) and Diversified Manufacturing Services (DMS), with EMS being the primary revenue driver. Jabil's services are integral to various industries, making its financial performance a bellwether for the broader hardware sector.
Financial Performance and Challenges
The company's net revenue for the quarter was $6.767 billion, a decrease from the $8.134 billion reported in the same quarter of the previous year. Despite this, Jabil Inc achieved a gross profit of $630 million and reported a significant increase in operating income to $1.131 billion, primarily due to a gain from the divestiture of businesses. Net income attributable to Jabil Inc was $927 million, or $7.31 per diluted share, compared to $207 million, or $1.52 per diluted share, in the prior year's quarter.
CEO Kenny Wilson commented on the results, stating,
Despite revenue headwinds this year, which are expected to be short-term, Im pleased with the resiliency of our model and our teams demonstrated ability to execute."
He also expressed confidence in the company's ability to expand margins and deliver a core EPS of $10.65 for FY25.
Financial Statements Highlights
Key details from the financial statements include a net cash provided by operating activities of $666 million for the first half of FY24. The balance sheet shows a healthy cash and cash equivalents position of $2.566 billion, up from $1.804 billion at the end of FY23. The company's adjusted free cash flow was positively impacted by the divestiture of businesses, with proceeds contributing to a net cash provided by investing activities of $1.558 billion.
Analysis of Jabil Inc's Performance
Jabil Inc's performance this quarter reflects a robust operational framework capable of withstanding market volatility. The company's strategic divestitures and cost optimization efforts have positioned it for future growth and margin expansion. The projected core diluted EPS of $10.65 for FY25 suggests that management is not only navigating current challenges but also setting the stage for increased profitability.
For investors, Jabil Inc's ability to generate strong free cash flow and maintain core operating margins in a challenging environment is a testament to its operational excellence and strategic foresight. As the company continues to optimize its cost structure and capitalize on diversified market opportunities, it remains an intriguing prospect for value investors focused on long-term growth and stability.
For more detailed financial information and future outlooks, interested parties can access the full earnings report and listen to the earnings call via the Investor Relations section of Jabils website.
Explore the complete 8-K earnings release (here) from Jabil Inc for further details.
This article first appeared on GuruFocus.
