Jabil (JBL) Q1 Earnings Surpass Estimates, Top Line Falls Y/Y
Jabil Inc. JBL reported healthy first-quarter fiscal 2024 results, with the top and the bottom line beating the respective Zacks Consensus Estimate. The company reported a revenue decline year over year due to sluggish demand trends in various end markets. Despite weak demand trends, management’s focus on innovation and efficiency boosted the core operating margin.
Net Income
Net income on a GAAP basis in the quarter was $194 million or $1.47 per share compared with $223 million or $1.61 per share in the prior-year quarter. The decline was primarily attributable to top-line contraction.
Non-GAAP net income in the reported quarter was $343 million or $2.60 per share compared with $319 million or $2.31 per share in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate of $2.54.
Jabil, Inc. Price, Consensus and EPS Surprise
Jabil, Inc. price-consensus-eps-surprise-chart | Jabil, Inc. Quote
Revenues
Quarterly revenues decreased to $8,387 million from $9,635 million reported in the year-ago quarter. The top line beat the consensus estimate of $8,351 million. A shift in consumers’ demand schedule, owing to uncertainty in various end markets, impeded the top line.
Net sales from Diversified Manufacturing Services declined 6% year over year. Electronics Manufacturing Services were down 21% compared to the prior-year quarter.
Other Details
Gross profit stood at $775 million compared with $743 million in the year ago quarter. Non-GAAP operating income aggregated $499 million compared with $461 million in the year-ago period.
Cash Flow & Liquidity
In the first quarter of fiscal 2024, Jabil generated $448 million of net cash from operating activities compared with $166 million in the prior-year quarter. As of Nov 30, 2023, the company had $1,550 million in cash and cash equivalents, with $2,876 million of notes payable and long-term debt.
Outlook
For second-quarter fiscal 2024, revenues are expected to be in the range of $7.0-$7.6 billion. Non-GAAP operating income is projected in the $339-$399 million range. Management estimates non-GAAP earnings per share within the band of $1.73-$2.13.
For fiscal 2024, Jabil estimated net revenues to be $31 billion, with more than $9 in core earnings per share. The core operating margin is expected in the range of 5.3-5.5%.
Zacks Rank & Stocks to Consider
Jabil currently has a Zacks Rank #3 (Hold).
Model N Inc MODN, carrying a Zacks Rank #2 (Buy) at present, delivered an earnings surprise of 20.78%, on average, in the trailing four quarters. In the last reported quarter, it pulled off an earnings surprise of 3.33%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MODN provides revenue management solutions for life sciences and technology companies, including applications for configuration, price, quote, rebate management and regulatory compliance.
NVIDIA Corporation NVDA, currently carrying a Zacks Rank #2, delivered an earnings surprise of 18.99%, on average, in the trailing four quarters. In the last reported quarter, it pulled off an earnings surprise of 19.64%.
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit. Over the years, the company’s focus evolved from PC graphics to AI-based solutions that support high-performance computing, gaming and virtual reality platforms.
Arista Networks, Inc. ANET, carrying a Zacks Rank #2, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista delivered an earnings surprise of 12%, on average, in the trailing four quarters.
ANET holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed data center segment. Arista is gaining market traction in 200- and 400-gigabit high-performance switching products and is well-positioned for healthy growth in the data-driven cloud networking business with proactive platforms and predictive operations.
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