Jabil, Inc. (JBL - Free Report) reported first-quarter fiscal 2019 earnings of 90 cents per share, which beat the Zacks Consensus Estimate by a nickel and increased 12.5% year over year.
Revenues increased 16.5% year over year to $6.51 billion that outpaced the Zacks Consensus Estimate of $6.05 billion.
Quarter Details
Electronics Manufacturing Services (EMS) revenues (54% of total revenues) increased 22% year over year to $3.5 billion, driven by robust performance in print and retail, Industrial & Energy, 5G and cloud end-markets.
Diversified Manufacturing Services (DMS) revenues (46% of revenues) increased 10% year over year to $3 billion, driven by strength in healthcare, edge devices and accessories, and lifestyle end-markets.
Gross margin on a GAAP basis contracted 40 basis points (bps) year over year to 8%.
Operating expenses on a GAAP basis declined 110 bps to 4.7%. Selling, general and administrative (SG&A) expenses as percentage of revenues decreased 100 bps to 4.3%. However, research & development (R&D) expenses remained unchanged at 0.2%.
Non-GAAP core operating margin contacted 20 bps to 3.9%.
EMS core margin declined 60 bps on a year-over-year basis, primarily due to softness in the capital equipment space and the costs associated with ramping of new business awards. However, DMS core margin improved 40 bps on a year-over-year basis.
Balance Sheet & Cash Flow
Jabil exited the quarter with cash and cash equivalents of $804.4 million compared with $1.26 billion in the previous quarter.
In the quarter, cash flow from operations was $5.2 million, while free cash outflow $216.1 million
Jabil bought shares worth more than $200 million in the quarter.
Guidance
For second-quarter fiscal 2019, Jabil expects total revenues between $5.8 billion and $6.4 billion. Revenues are expected to grow almost 15% year over year.
DMS revenues are forecast to be $2.85 billion, up roughly 6% year over year. EMS revenues are forecasted to be $3.25 billion, up nearly 23% year over year.
Core operating income is estimated to be $165-$205 million. The company’s core earnings are expected to be 51-71 cents per share on a non-GAAP basis.
Jabil is focusing on end-market diversification. Management expects growth to come from end-markets like healthcare and packaging, automotive, 5G wireless and cloud. New award wins for fiscal 2019 is roughly $2.15 billion, out of almost $1.06 billion related to the EMS segment.
For fiscal 2019, Jabil expects earnings of $3 per share on revenues of $25 billion. Adjusted free cash flow is expected around $350 million.
Zacks Rank & Stocks to Consider
Jabil currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector include HubSpot (HUBS - Free Report) , Monolithic Power Systems (MPWR - Free Report) and Splunk . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rate for HubSpot, Monolithic Power and Splunk is projected to be 50%, 25% and 28.4%, respectively.
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Jabil, Inc. (JBL - Free Report) reported first-quarter fiscal 2019 earnings of 90 cents per share, which beat the Zacks Consensus Estimate by a nickel and increased 12.5% year over year.
Revenues increased 16.5% year over year to $6.51 billion that outpaced the Zacks Consensus Estimate of $6.05 billion.
Quarter Details
Electronics Manufacturing Services (EMS) revenues (54% of total revenues) increased 22% year over year to $3.5 billion, driven by robust performance in print and retail, Industrial & Energy, 5G and cloud end-markets.
Diversified Manufacturing Services (DMS) revenues (46% of revenues) increased 10% year over year to $3 billion, driven by strength in healthcare, edge devices and accessories, and lifestyle end-markets.
Gross margin on a GAAP basis contracted 40 basis points (bps) year over year to 8%.
Operating expenses on a GAAP basis declined 110 bps to 4.7%. Selling, general and administrative (SG&A) expenses as percentage of revenues decreased 100 bps to 4.3%. However, research & development (R&D) expenses remained unchanged at 0.2%.
Non-GAAP core operating margin contacted 20 bps to 3.9%.
EMS core margin declined 60 bps on a year-over-year basis, primarily due to softness in the capital equipment space and the costs associated with ramping of new business awards. However, DMS core margin improved 40 bps on a year-over-year basis.
Balance Sheet & Cash Flow
Jabil exited the quarter with cash and cash equivalents of $804.4 million compared with $1.26 billion in the previous quarter.
In the quarter, cash flow from operations was $5.2 million, while free cash outflow $216.1 million
Jabil bought shares worth more than $200 million in the quarter.
Guidance
For second-quarter fiscal 2019, Jabil expects total revenues between $5.8 billion and $6.4 billion. Revenues are expected to grow almost 15% year over year.
DMS revenues are forecast to be $2.85 billion, up roughly 6% year over year. EMS revenues are forecasted to be $3.25 billion, up nearly 23% year over year.
Core operating income is estimated to be $165-$205 million. The company’s core earnings are expected to be 51-71 cents per share on a non-GAAP basis.
Jabil is focusing on end-market diversification. Management expects growth to come from end-markets like healthcare and packaging, automotive, 5G wireless and cloud. New award wins for fiscal 2019 is roughly $2.15 billion, out of almost $1.06 billion related to the EMS segment.
For fiscal 2019, Jabil expects earnings of $3 per share on revenues of $25 billion. Adjusted free cash flow is expected around $350 million.
Zacks Rank & Stocks to Consider
Jabil currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector include HubSpot (HUBS - Free Report) , Monolithic Power Systems (MPWR - Free Report) and Splunk . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rate for HubSpot, Monolithic Power and Splunk is projected to be 50%, 25% and 28.4%, respectively.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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