Jabil Posts Third Quarter Results
Jabil (NYSE: JBL) has reported preliminary unaudited financial results for Q3 of fiscal year 2024, noting substantial transformations including divestment of its Mobility business and growth in AI datacenters. Key figures include $6.8 billion in net revenue, $261 million in U.S. GAAP operating income, and $1.06 GAAP diluted EPS. Non-GAAP core operating income was $350 million, with $1.89 core diluted EPS. For Q4, Jabil projects $6.3-$6.9 billion in net revenue, $285-$355 million in GAAP operating income, and $1.40-$1.88 GAAP diluted EPS. Full-year forecasts include $28.5 billion in net revenue, 5.6% core operating margin, $8.40 core diluted EPS, and over $1 billion in adjusted free cash flow. CEO Mike Dastoor emphasized the company's solid positioning in various growth sectors like datacenter power, electric vehicles, and healthcare.
- Net revenue of $6.8 billion for Q3 FY2024.
- Core diluted EPS (Non-GAAP) was $1.89 for Q3 FY2024.
- Full-year FY2024 guidance includes core diluted EPS of $8.40.
- Projected full-year net revenue of $28.5 billion.
- Over $1 billion in adjusted free cash flow expected for full-year FY2024.
- Experienced softness in multiple end-markets.
Jabil's third quarter financial results indicate a mixed landscape for the company. Net revenue stands at
However, there are concerns regarding the softness across multiple end-markets, which may affect future revenue growth. The revenue estimate for Q4 of $6.3 billion to $6.9 billion suggests a potential decline from Q3, which could be a red flag for investors watching for consistent growth. Furthermore, while the company has divested its mobility business and is focusing on high-growth areas like AI datacenter space, these segments might take time to scale up and contribute significantly to the bottom line.
Looking at the long-term horizon, Jabil's involvement in datacenter power and cooling, electric and hybrid vehicles, healthcare and automated warehousing aligns with global trends, providing a potential for sustained growth. However, the benefits from these sectors may not be immediate and there is execution risk involved in transitioning focus areas.
From a market perspective, Jabil's strategic shift and sector focus provide interesting insights. The divestiture of the mobility business likely indicates a pivot towards more high-margin and future-oriented sectors. The expansion into AI datacenter and other growth areas is timely given the current market trends. However, the anticipated softness in multiple end-markets suggests that there may be some transitional challenges impacting short-term performance.
The projected $1+ billion adjusted free cash flow is a significant positive, as it reflects Jabil’s ability to generate liquidity despite market uncertainties. This financial flexibility can be advantageous for further investments or acquisitions in their new areas of focus. The company’s commitment to share repurchase programs also signifies a shareholder-friendly approach and can lead to a higher earnings per share in the future, enhancing shareholder value.
However, it's important to remain cautious about the volatile macroeconomic environment and its potential impact on Jabil’s key markets. Short-term softness could also affect investor sentiment, making it essential to monitor how quickly the new strategic initiatives translate into revenue and profit growth.
“It's clear that Jabil has navigated a period of significant transformation this fiscal year: a year in which we divested our Mobility business, captured growth in the AI datacenter space, and experienced softness across multiple end-markets,” said CEO Mike Dastoor. “Despite these moving pieces, we remain on track to deliver
Third Quarter of Fiscal Year 2024 Highlights:
• Net revenue: |
• |
• |
• Core operating income (Non-GAAP): |
• Core diluted earnings per share (Non-GAAP): |
Fourth Quarter of Fiscal Year 2024 Outlook:
• Net revenue |
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• |
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• |
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• Core operating income (Non-GAAP)(1) |
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• Core diluted earnings per share (Non-GAAP)(1) |
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__________________ | |
(1) |
Core operating income and core diluted earnings per share exclude anticipated adjustments of |
Fiscal Year 2024 Outlook:
• Net revenue |
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• Core operating margin (Non-GAAP) |
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• Core diluted earnings per share (Non-GAAP) |
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|
• Adjusted free cash flow (Non-GAAP) |
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|
(Definitions: “U.S. GAAP” means
Forward Looking Statements: This release contains forward-looking statements, including those regarding our anticipated financial results for our third quarter of fiscal year 2024 and our guidance for future financial performance in our fourth quarter of fiscal year 2024 (including, net revenue,
Supplemental Information Regarding Non-GAAP Financial Measures: Jabil provides supplemental, non-GAAP financial measures in this release to facilitate evaluation of Jabil’s core operating performance. These non-GAAP measures exclude certain amounts that are included in the most directly comparable
Jabil reports core operating income, core earnings, core diluted earnings per share and adjusted free cash flows to provide investors an additional method for assessing operating income, earnings, earnings per share and free cash flow from what it believes are its core manufacturing operations. Among other uses, management uses non-GAAP financial measures to make operating decisions, assess business performance and as a factor in determining certain employee performance when determining incentive compensation.
The Company determines an annual normalized tax rate (“normalized core tax rate”) for the computation of the non-GAAP (core) income tax provision to provide better consistency across reporting periods. In estimating the normalized core tax rate annually, the Company utilizes a full-year financial projection of core earnings that considers the mix of earnings across tax jurisdictions, existing tax positions, and other significant tax matters. The Company may adjust the normalized core tax rate during the year for material impacts from new tax legislation or material changes to the Company’s operations.
Detailed definitions of certain of the core financial measures are included above under “Definitions” and a reconciliation of the disclosed core financial measures to the most directly comparable
Meeting and Replay Information: Jabil will hold a conference call today at 8:30 a.m. ET to discuss its earnings for the third quarter of fiscal year 2024. To access the live audio webcast and view the accompanying slide presentation, visit the Investor Relations section of Jabil’s website, located at https://investors.jabil.com. An archived replay of the webcast will also be available after completion of the call.
About Jabil: At Jabil (NYSE: JBL), we are proud to be a trusted partner for the world's top brands, offering comprehensive engineering, manufacturing, and supply chain solutions. With over 50 years of experience across industries and a vast network of over 100 sites worldwide, Jabil combines global reach with local expertise to deliver both scalable and customized solutions. Our commitment extends beyond business success as we strive to build sustainable processes that minimize environmental impact and foster vibrant and diverse communities around the globe. Discover more at www.jabil.com.
JABIL INC. AND SUBSIDIARIES |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(in millions) |
|||||||
|
May 31, 2024 |
|
|
||||
|
(unaudited) |
|
August 31, 2023 |
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
2,457 |
|
|
$ |
1,804 |
|
Accounts receivable, net |
|
3,382 |
|
|
|
3,647 |
|
Contract assets |
|
1,121 |
|
|
|
1,035 |
|
Inventories, net |
|
4,439 |
|
|
|
5,206 |
|
Prepaid expenses and other current assets |
|
1,494 |
|
|
|
1,109 |
|
Assets held for sale |
|
— |
|
|
|
1,929 |
|
Total current assets |
|
12,893 |
|
|
|
14,730 |
|
Property, plant and equipment, net |
|
2,963 |
|
|
|
3,137 |
|
Operating lease right-of-use asset |
|
366 |
|
|
|
367 |
|
Goodwill and intangible assets, net |
|
810 |
|
|
|
763 |
|
Deferred income taxes |
|
129 |
|
|
|
159 |
|
Other assets |
|
288 |
|
|
|
268 |
|
Total assets |
$ |
17,449 |
|
|
$ |
19,424 |
|
LIABILITIES AND EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Current installments of notes payable and long-term debt |
$ |
— |
|
|
$ |
— |
|
Accounts payable |
|
5,398 |
|
|
|
5,679 |
|
Accrued expenses |
|
5,929 |
|
|
|
5,515 |
|
Current operating lease liabilities |
|
96 |
|
|
|
104 |
|
Liabilities held for sale |
|
— |
|
|
|
1,397 |
|
Total current liabilities |
|
11,423 |
|
|
|
12,695 |
|
Notes payable and long-term debt, less current installments |
|
2,879 |
|
|
|
2,875 |
|
Other liabilities |
|
331 |
|
|
|
319 |
|
Non-current operating lease liabilities |
|
285 |
|
|
|
269 |
|
Income tax liabilities |
|
112 |
|
|
|
131 |
|
Deferred income taxes |
|
143 |
|
|
|
268 |
|
Total liabilities |
|
15,173 |
|
|
|
16,557 |
|
Commitments and contingencies |
|
|
|
||||
Equity: |
|
|
|
||||
Jabil Inc. stockholders’ equity: |
|
|
|
||||
Preferred stock |
|
— |
|
|
|
— |
|
Common stock |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
2,881 |
|
|
|
2,795 |
|
Retained earnings |
|
5,632 |
|
|
|
4,412 |
|
Accumulated other comprehensive loss |
|
(18 |
) |
|
|
(17 |
) |
Treasury stock, at cost |
|
(6,219 |
) |
|
|
(4,324 |
) |
Total Jabil Inc. stockholders’ equity |
|
2,276 |
|
|
|
2,866 |
|
Noncontrolling interests |
|
— |
|
|
|
1 |
|
Total equity |
|
2,276 |
|
|
|
2,867 |
|
Total liabilities and equity |
$ |
17,449 |
|
|
$ |
19,424 |
|
JABIL INC. AND SUBSIDIARIES |
|||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||
(in millions, except for per share data) |
|||||||||||||
(Unaudited) |
|||||||||||||
|
|
Three months ended |
|
Nine months ended |
|||||||||
|
|
May 31, 2024 |
|
May 31, 2023 |
|
May 31, 2024 |
|
May 31, 2023 |
|||||
Net revenue |
|
$ |
6,765 |
|
$ |
8,475 |
|
$ |
21,919 |
|
|
$ |
26,244 |
Cost of revenue |
|
|
6,157 |
|
|
7,778 |
|
|
19,906 |
|
|
|
24,143 |
Gross profit |
|
|
608 |
|
|
697 |
|
|
2,013 |
|
|
|
2,101 |
Operating expenses: |
|
|
|
|
|
|
|
|
|||||
Selling, general and administrative |
|
|
268 |
|
|
307 |
|
|
890 |
|
|
|
911 |
Research and development |
|
|
9 |
|
|
8 |
|
|
29 |
|
|
|
25 |
Amortization of intangibles |
|
|
12 |
|
|
7 |
|
|
27 |
|
|
|
24 |
Restructuring, severance and related charges |
|
|
55 |
|
|
— |
|
|
252 |
|
|
|
45 |
Gain from the divestiture of businesses |
|
|
— |
|
|
— |
|
|
(944 |
) |
|
|
— |
Acquisition and divestiture related charges |
|
|
3 |
|
|
— |
|
|
64 |
|
|
|
— |
Operating income |
|
|
261 |
|
|
375 |
|
|
1,695 |
|
|
|
1,096 |
Interest and other, net |
|
|
60 |
|
|
69 |
|
|
197 |
|
|
|
204 |
Income before income tax |
|
|
201 |
|
|
306 |
|
|
1,498 |
|
|
|
892 |
Income tax expense |
|
|
72 |
|
|
73 |
|
|
248 |
|
|
|
229 |
Net income |
|
|
129 |
|
|
233 |
|
|
1,250 |
|
|
|
663 |
Net income attributable to noncontrolling interests, net of tax |
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
Net income attributable to Jabil Inc. |
|
$ |
129 |
|
$ |
233 |
|
$ |
1,250 |
|
|
$ |
663 |
Earnings per share attributable to the stockholders of Jabil Inc.: |
|
|
|
|
|
|
|
|
|||||
Basic |
|
$ |
1.08 |
|
$ |
1.76 |
|
$ |
10.01 |
|
|
$ |
4.96 |
Diluted |
|
$ |
1.06 |
|
$ |
1.72 |
|
$ |
9.86 |
|
|
$ |
4.86 |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|||||
Basic |
|
|
119.9 |
|
|
132.3 |
|
|
124.9 |
|
|
|
133.6 |
Diluted |
|
|
121.7 |
|
|
135.1 |
|
|
126.9 |
|
|
|
136.4 |
JABIL INC. AND SUBSIDIARIES |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(in millions) |
|||||||
(Unaudited) |
|||||||
|
Nine months ended |
||||||
|
May 31, 2024 |
|
May 31, 2023 |
||||
Cash flows provided by operating activities: |
|
|
|
||||
Net income |
$ |
1,250 |
|
|
$ |
663 |
|
Depreciation, amortization, and other, net |
|
557 |
|
|
|
752 |
|
Gain from the divestiture of businesses |
|
(944 |
) |
|
|
— |
|
Change in operating assets and liabilities, exclusive of net assets acquired |
|
318 |
|
|
|
(367 |
) |
Net cash provided by operating activities |
|
1,181 |
|
|
|
1,048 |
|
Cash flows provided by (used in) investing activities: |
|
|
|
||||
Acquisition of property, plant and equipment |
|
(660 |
) |
|
|
(860 |
) |
Proceeds and advances from sale of property, plant and equipment |
|
115 |
|
|
|
180 |
|
Cash paid for business and intangible asset acquisitions, net of cash |
|
(90 |
) |
|
|
(30 |
) |
Proceeds from the divestiture of businesses, net of cash |
|
2,108 |
|
|
|
— |
|
Other, net |
|
(6 |
) |
|
|
(28 |
) |
Net cash provided by (used in) investing activities |
|
1,467 |
|
|
|
(738 |
) |
Cash flows used in financing activities: |
|
|
|
||||
Borrowings under debt agreements |
|
1,895 |
|
|
|
3,556 |
|
Payments toward debt agreements |
|
(1,987 |
) |
|
|
(3,369 |
) |
Payments to acquire treasury stock |
|
(1,824 |
) |
|
|
(442 |
) |
Dividends paid to stockholders |
|
(32 |
) |
|
|
(34 |
) |
Net proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan |
|
31 |
|
|
|
27 |
|
Treasury stock minimum tax withholding related to vesting of restricted stock |
|
(68 |
) |
|
|
(36 |
) |
Other, net |
|
(4 |
) |
|
|
(6 |
) |
Net cash used in financing activities |
|
(1,989 |
) |
|
|
(304 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
(6 |
) |
|
|
(4 |
) |
Net increase in cash and cash equivalents |
|
653 |
|
|
|
2 |
|
Cash and cash equivalents at beginning of period |
|
1,804 |
|
|
|
1,478 |
|
Cash and cash equivalents at end of period |
$ |
2,457 |
|
|
$ |
1,480 |
|
JABIL INC. AND SUBSIDIARIES |
|||||||||||||||
SUPPLEMENTAL DATA |
|||||||||||||||
RECONCILIATION OF |
|||||||||||||||
(in millions, except for per share data) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
Three months ended |
|
Nine months ended |
||||||||||||
|
May 31, 2024 |
|
May 31, 2023 |
|
May 31, 2024 |
|
May 31, 2023 |
||||||||
Operating income ( |
$ |
261 |
|
|
$ |
375 |
|
|
$ |
1,695 |
|
|
$ |
1,096 |
|
Amortization of intangibles |
|
12 |
|
|
|
7 |
|
|
|
27 |
|
|
|
24 |
|
Stock-based compensation expense and related charges |
|
3 |
|
|
|
18 |
|
|
|
72 |
|
|
|
80 |
|
Restructuring, severance and related charges(1) |
|
55 |
|
|
|
— |
|
|
|
252 |
|
|
|
45 |
|
Net periodic benefit cost |
|
2 |
|
|
|
4 |
|
|
|
7 |
|
|
|
11 |
|
Business interruption and impairment charges, net(2) |
|
14 |
|
|
|
— |
|
|
|
14 |
|
|
|
— |
|
Gain from the divestiture of businesses(3) |
|
— |
|
|
|
— |
|
|
|
(944 |
) |
|
|
— |
|
Acquisition and divestiture related charges(3) |
|
3 |
|
|
|
— |
|
|
|
64 |
|
|
|
— |
|
Adjustments to operating income |
|
89 |
|
|
|
29 |
|
|
|
(508 |
) |
|
|
160 |
|
Core operating income (Non-GAAP) |
$ |
350 |
|
|
$ |
404 |
|
|
$ |
1,187 |
|
|
$ |
1,256 |
|
Net income attributable to Jabil Inc. ( |
$ |
129 |
|
|
$ |
233 |
|
|
$ |
1,250 |
|
|
$ |
663 |
|
Adjustments to operating income |
|
89 |
|
|
|
29 |
|
|
|
(508 |
) |
|
|
160 |
|
Net periodic benefit cost |
|
(2 |
) |
|
|
(4 |
) |
|
|
(7 |
) |
|
|
(11 |
) |
Adjustments for taxes |
|
14 |
|
|
|
11 |
|
|
|
51 |
|
|
|
32 |
|
Core earnings (Non-GAAP) |
$ |
230 |
|
|
$ |
269 |
|
|
$ |
786 |
|
|
$ |
844 |
|
Diluted earnings per share ( |
$ |
1.06 |
|
|
$ |
1.72 |
|
|
$ |
9.86 |
|
|
$ |
4.86 |
|
Diluted core earnings per share (Non-GAAP) |
$ |
1.89 |
|
|
$ |
1.99 |
|
|
$ |
6.20 |
|
|
$ |
6.18 |
|
Diluted weighted average shares outstanding ( |
|
121.7 |
|
|
|
135.1 |
|
|
|
126.9 |
|
|
|
136.4 |
|
__________________ | |
(1) |
Charges recorded during the three months and nine months ended May 31, 2024, related to the 2024 Restructuring Plan. |
(2) |
Charges recorded during the three months and nine months ended May 31, 2024, related to costs associated with product quality liabilities. |
(3) |
We completed the divestiture of our mobility business and recorded a pre-tax gain of |
JABIL INC. AND SUBSIDIARIES |
|||||||
SUPPLEMENTAL DATA |
|||||||
ADJUSTED FREE CASH FLOW |
|||||||
(in millions) |
|||||||
(Unaudited) |
|||||||
|
Nine months ended |
||||||
|
May 31, 2024 |
|
May 31, 2023 |
||||
Net cash provided by operating activities ( |
$ |
1,181 |
|
|
$ |
1,048 |
|
Acquisition of property, plant and equipment (“PP&E”)(1) |
|
(660 |
) |
|
|
(860 |
) |
Proceeds and advances from sale of PP&E(1) |
|
115 |
|
|
|
180 |
|
Adjusted free cash flow (Non-GAAP) |
$ |
636 |
|
|
$ |
368 |
|
__________________ |
|
(1) |
Certain customers co-invest in PP&E with us. As we acquire PP&E, we recognize the cash payments in acquisition of PP&E. When our customers reimburse us and obtain control, we recognized the cash receipts in proceeds and advances from the sale of PP&E. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240620182688/en/
Investor Contact
Adam Berry
Senior Vice President, Investor Relations and Communications
Adam_Berry@jabil.com
Media Contact
Timur Aydin
Senior Director, Enterprise Marketing and Communications
Timur_Aydin@jabil.com
Source: Jabil, Inc.
FAQ
What were the key financial results for Jabil (JBL) in Q3 FY2024?
What is Jabil's (JBL) earnings forecast for Q4 FY2024?