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Jabil (JBL) to Report Q1 Earnings: What's in the Cards?

Zacks Equity Research

Jabil JBL is set to report first-quarter fiscal 2020 results on Dec 17.

For first-quarter fiscal 2020, Jabil expects total revenues between $6.65 billion and $7.35 billion.
    
Diversified Manufacturing Services (DMS) revenues are forecast to be $3.1 billion, up roughly 3% year over year. Electronics Manufacturing Services (EMS) revenues are forecast to be $3.9 billion, up nearly 11% year over year.

Moreover, the company’s core earnings are expected between 82 cents and $1.04 per share on a non-GAAP basis.

The Zacks Consensus Estimate for earnings stayed at 94 cents over the past 30 days. The consensus mark for revenues is pegged at $6.96 billion, indicating growth of 6.93% from the year-ago quarter’s reported figure.

In fourth-quarter fiscal 2019, the company reported adjusted earnings of 88 cents per share, which beat the Zacks Consensus Estimate by a couple of cents and improved 25.7% year over year.

Revenues increased 13.9% year over year to $6.57 billion, which was within management’s guided range of $6.3-$6.9 billion. However, the figure lagged the Zacks Consensus Estimate of $6.61 billion.

Notably, the company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 3.73%.

Let’s see how things have shaped up for this announcement.

Jabil, Inc. Price and EPS Surprise

Jabil, Inc. Price and EPS Surprise

Jabil, Inc. price-eps-surprise | Jabil, Inc. Quote

Factors to Watch

Jabil’s fiscal first-quarter results are expected to have benefited from contract wins in healthcare, automotive, cloud and 5G. Moreover, improving end-market diversification is expected to have been a key catalyst.

The DMS segment is likely to have benefited from an improved business mix, driven by Jabil’s impressive diversification efforts. EMS growth is expected to have been driven by new business wins in 5G wireless, cloud and automotive end markets.

However, performance of Jabil’s DMS segment is expected to have suffered due to a soft mobility business and sluggish spending in the semiconductor capital equipment business. Moreover, increasing competition in the industry is expected to have weighed on margins.

Key Developments in Q1

Eguana announced that it has inked a multi-year master supply agreement with Jabil to manufacture its residential and commercial energy storage systems. Jabil will initially focus on QCELLS Enduro production.

What Our Model Says

According to the Zacks model, the right combination of two key ingredients — a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — increases the odds of a positive earnings surprise.

Jabil has an Earnings ESP of 0.00% and a Zacks Rank #3, which makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Here are some stocks you may consider, as according to our proven model, these have the right mix of elements to beat estimates this time around.

Perficient, Inc. PRFT presently has an Earnings ESP of +2.17% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Pfizer Inc. PFE currently has an Earnings ESP of +1.75% and a Zacks Rank of 2.

Cloudera, Inc. CLDR has an Earnings ESP of +4.55% and a Zacks Rank of 2.

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