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Jabil (JBL) Q4 Earnings and Revenues Surpass Estimates

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Jabil Inc. (JBL - Free Report) reported better-than-expected fiscal fourth-quarter 2017 results wherein both the top and the bottom line surpassed the Zacks Consensus Estimate and recorded year-over-year improvement.

The company reported earnings of 64 cents per share, which beat the Zacks Consensus Estimate of 61 cents and were much higher than the prior-year quarter’s figure of 28 cents.

Revenues increased year over year to $5.02 billion from $4.43 billion and outpaced the Zacks Consensus Estimate of $4.89 billion as well.

Electronics Manufacturing Services (EMS) revenues (representing 57% of revenues) came in at about $2.87 billion, up 3% year over year. Diversified Manufacturing Services (DMS) revenues (43% of revenues) increased 32% year over year to $2.15 billion.

The year-over-year improvement was primarily driven by the better-than-expected performance of the EMS segment coupled with double-digit growth at the company’s Healthcare and Packaging businesses part of the DMS segment.

The company earned approximately $191.5 million in core operating income. Core operating margin was 3.8%, representing a 140 basis points (bps) improvement year over year.

Notably, shares of Jabil have gained 20.6% year to date, outperforming the industry’s rally of 12.7%.



Operating Details

Gross margin expanded nearly 120 bps on a year-over-year basis to 8.5%.

The company’s operating income increased 25.9% year on year to $118.1 million.

Balance Sheet & Cash Flow

The company exited the quarter with cash and cash equivalents of $1.19 billion, compared with $912.1 million as of Aug 31, 2016.

Cash flow from operations in fiscal 2017 was $1.26 billion compared with $916.2 million in fiscal 2016.

Restructuring Program

The company continued with its plans to realign its global capacity and administrative support infrastructure so as to optimize organizational effectiveness amid a sluggish macroeconomic scenario. The company is progressing with its efforts to improve organizational efficiency and effectiveness as planned. The company incurred approximately $160 million in charges in fiscal 2017.

Jabil Circuit, Inc. Price, Consensus and EPS Surprise

 

Jabil Circuit, Inc. Price, Consensus and EPS Surprise | Jabil Circuit, Inc. Quote

Guidance

The company provided guidance for first-quarter fiscal 2018.

For the first quarter, Jabil expects total revenue to increase 8% (at mid-point) year over year in the range of $5.25–$5.75 billion. Core operating income is estimated in the range of $198–$258 million.

DMS revenues are forecast to grow 13% year over year to $2.7 billion.

EMS revenues are anticipated to increase 3% on a year-over-year basis to $2.8 billion.

The company is expected to post core earnings in the range of 65–91 cents per share on a non-GAAP basis.

Zacks Rank & Stocks to Consider

Currently, Jabil Circuit sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Other key stocks in the broader technology sector include, Applied Materials (AMAT - Free Report) , Activision Blizzard and IPG Photonics (IPGP - Free Report) , all sporting a Zacks Rank #1.

Long-term earnings growth rate for Applied Materials, Activision Blizzard and IPG Photonics is projected to be 17.1%, 13.6% and 19.7%, respectively.
 
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