Yahoo Finance Jabil (JBL) Q3 Earnings Beat Estimates, Top Line Falls Y/Y
Jabil Inc. JBL reported relatively modest third-quarter fiscal 2024 results, with both the bottom and top line surpassing the Zacks Consensus Estimate. However, weakness in multiple end markets, including networking, storage, industrial & semi cap, retail, 5G wireless & cloud, led to a revenue contraction year over year. Growth in the auto & transportation end market partially cushioned the top line.
Net Income
Net income on a GAAP basis in the quarter was $129 million or $1.06 per share compared with $233 million or $1.72 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 $230 million or $1.89 per share compared with $269 million or $1.99 per share in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate of $1.85.
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 $6.76 billion from $8.48 billion reported in the year-ago quarter. The top line beat the consensus estimate of $6.51 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.
Net sales from Diversified Manufacturing Services declined 23% year over year. Electronics Manufacturing Services were down 18% compared to the prior-year quarter.
Other Details
Gross profit was $608 million compared with $697 million in the year ago quarter. Non-GAAP operating income aggregated $350 million, down from $404 million in the year-ago period. Non-GAAP operating margin was 5.2% compared with 4.8% in the year ago quarter.
Cash Flow & Liquidity
In the first nine months of fiscal 2024, Jabil generated $1.18 billion of net cash from operating activities compared with $1.05 billion in the prior-year period. As of May 31, 2024, the company had $2.46 billion in cash and cash equivalents, with $2.88 billion of notes payable and long-term debt
Outlook
For fourth-quarter fiscal 2024, revenues are expected to be in the range of $6.3-$6.9 billion. Non-GAAP operating income is projected in the $365-$425 million range. Management estimates non-GAAP earnings per share within the band of $2.03-$2.43.
For fiscal 2024, Jabil estimated net revenues to be $28.5 billion. Core earnings per share is projected at $8.40, and the core operating margin is expected at about 5.6%. The company is expected to generate free cash flow of more than $1 billion.
Zacks Rank & Stocks to Consider
Jabil currently has a Zacks Rank #4 (Sell).
NVIDIA Corporation NVDA, sporting a Zacks Rank #1 (Strong Buy) at present, delivered a trailing four-quarter earnings surprise of 18.43%, on average. In the last reported quarter, it delivered an earnings surprise of 11.48%. You can see the complete list of today’s Zacks #1 Rank stocks here.
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, sporting a Zacks Rank #1 at present, 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 has a long-term earnings growth expectation of 15.68% and delivered an earnings surprise of 15.39%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200 and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
Silicon Motion Technology Corporation SIMO, sporting a Zacks Rank #1 at present, delivered a trailing four-quarter average earnings surprise of 4.72%.
It is a leading developer of microcontroller ICs for NAND flash storage devices. The semiconductor company also designs, develops and markets high-performance, low-power semiconductor solutions for original equipment manufacturers and other customers.
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