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Jabil (JBL) to Report Q2 Earnings: What's in the Cards?

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Jabil Inc. (JBL - Free Report) is set to report fiscal second-quarter 2018 results on Mar 15. The company  beat the Zack Consensus Estimate in each of the trailing four quarters, delivering an average positive surprise of 5.26%.

Last quarter, the company reported better-than-expected results. Earnings of 80 cents per share 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.

Notably, Jabil shares have gained 7% in the past year against the industry’s decline of 1.8%.



Let's see how things are shaping up for this announcement.

Factors at Play

Jabil continues to be driven by its Diversified Manufacturing Services (DMS) segment, which is backed by growing healthcare and packaging business. Jabil is also benefiting from its Green Point business. Management forecasts DMS revenues to grow 25% year over year.

Jabil’s Electronic Manufacturing Services (EMS) sector is benefiting from growth in sectors like automotive, energy, industrial businesses and semi-cap equipment. Shift toward higher-margin businesses is a positive for the company.

However, softness in the legacy storage business is a concern. Management anticipates EMS revenues to increase  a marginal 1% on a year-over-year basis in the soon-to-be-reported quarter.

However, escalating market competition and macroeconomic headwinds continue to be concerns.  With Apple (AAPL - Free Report) being the biggest customer of the company, sluggish sales of iPhones poses a huge risk to the company.

Jabil, Inc. Price and EPS Surprise

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

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Jabil has an Earnings ESP of 0.00% and a Zacks Rank #3. Therefore, our proven model does not show that the company is likely to deliver a positive surprise this quarter.

Stocks With a Favorable Combination

Here are some companies you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter.

Entegris, Inc. (ENTG - Free Report) has an Earnings ESP of +0.48 and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

FactSet Research Systems Inc. (FDS - Free Report) has an Earnings ESP of +0.18% and a Zacks Rank #2.

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