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Jabil (JBL) Q1 Earnings and Revenues Surpass Estimates

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Jabil Inc. (JBL - Free Report) reported better-than-expected fiscal first-quarter 2018 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 80 cents per share, which beat the Zacks Consensus Estimate of 78 cents and were much higher than the prior-year quarter’s figure of 69 cents.

Revenues increased 9.4% year over year to $5.586 billion and outpaced the Zacks Consensus Estimate of $5.499 billion as well.

Electronics Manufacturing Services (EMS) revenues were up 6% year over year which translates to nearly $2.9 billion (representing 51% of revenues).

Diversified Manufacturing Services (DMS) revenues increased 13% year over year which translates to approximately $2.7 billion (representing 49% of revenues).

Notably, shares of Jabil have gained 15.9% year to date, outperforming the industry’s rally of 11.9%.



 

Operating Details

Gross margin contracted nearly 100 basis points (bps) on a year-over-year basis to 8.4%.

The company’s operating income decreased 12% year on year to $145.8 million.

The company’s core operating income increased to $227.2 million from $209.5 million in the year-ago quarter. However, core operating margin remained unchanged at 4.1%

Balance Sheet & Cash Flow

The company exited the quarter with cash and cash equivalents of $746.3 million, compared with $1.19 billion as of Aug 31, 2017.

The company used $53.6 million of cash for operating activities in the first quarter of fiscal 2018.

Guidance

For the second quarter, Jabil expects total revenues to increase 10% (at mid-point) year over year in the range of $4.75–$5.05 billion. Core operating income is estimated in the range of $160–$200 million.

DMS revenues are forecast to grow 25% year over year.

EMS revenues are anticipated to increase 1% on a year-over-year basis.

The company is expected to post core earnings in the range of 50–74 cents per share on a non-GAAP basis.

The company expects core earnings per share of $2.6 for fiscal 2018.

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Zacks Rank & Key Picks

Jabil carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include IPG Photonics Corporation (IPGP - Free Report) ,  NetApp Inc. (NTAP - Free Report) and NVIDIA Corporation (NVDA - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Long-term earnings growth rate for IPG Photonics, NetApp and NVIDIA is projected to be 12%, 11.3% and 10.3%, respectively.
 
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