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Jabil (JBL) Up 2.8% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Jabil (JBL - Free Report) . Shares have added about 2.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Jabil due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Jabil Q4 Earnings Beat Estimates, Revenues Fall Short
Jabil reported fourth-quarter fiscal 2021 earnings of $1.44 per share, which beat the Zacks Consensus Estimate by 5.88% and increased 46.9% from the year-ago quarter.
Revenues increased 1.5% year over year to $7.40 billion and were within the guidance of $7.3-$7.9 billion. The figure, however, missed the Zacks Consensus Estimate by 2.9%.
Jabil witnessed some supply-chain headwinds in the fiscal fourth quarter, mainly in healthcare, industrial and cloud. This was partly offset by upsides in connected devices and networking and storage.
Quarter Details
Electronics Manufacturing Services (EMS) revenues accounted for 47% of total revenues and decreased 6% year over year to $3.48 billion due to the previously announced transition to a consignment model.
Diversified Manufacturing Services (DMS) revenues accounted for the rest of the total revenues and improved 10% year over year to $3.92 billion. The strong year-over-year performance in the DMS segment was broad-based with strength across healthcare, automotive and mobility businesses.
Gross margin, on a GAAP basis, expanded 120 basis points (bps) year over year to 7.9%.
Core EBITDA margin expanded 120 bps on a year-over-year basis to 7.2%.
As a percentage of revenues, selling, general and administrative (SG&A) expenses expanded 50 bps year over year to 4%, while research & development (R&D) expenses contracted 10 bps on a year-over-year basis to 0.1%.
Non-GAAP core operating margin expanded 70 bps on a year-over-year basis to 4.2%. The strong expansion was driven by steady top-line growth.
Balance Sheet & Cash Flow
As of Aug 31, 2021, cash and cash equivalents were $1.56 billion compared with $1.24 billion as of May 31, 2021. The company ended fourth-quarter fiscal 2021 with committed capacity under the global credit facilities of $3.8 billion. With this available capacity, along with year-end cash balance, Jabil ended fiscal 2021 with access to more than $5.3 billion of available liquidity.
During the fiscal fourth quarter, the company repurchased 2.9 million shares, bringing the total shares repurchased in fiscal 2021 to 8.8 million shares or $477 million.
Guidance
For first-quarter fiscal 2022, Jabil expects total revenues between $8 billion and $8.6 billion.
DMS revenues are expected to be $4.7 billion, which suggests an increase of 10% year over year. EMS revenues are forecast to remain unchanged year over year at $3.6 billion.
Core operating income is estimated in the $365-$425 million range. The company’s earnings are expected between $1.41 and $1.61 per share on a non-GAAP basis.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Jabil has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Jabil has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Jabil (JBL) Up 2.8% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Jabil (JBL - Free Report) . Shares have added about 2.8% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Jabil due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Jabil Q4 Earnings Beat Estimates, Revenues Fall Short
Jabil reported fourth-quarter fiscal 2021 earnings of $1.44 per share, which beat the Zacks Consensus Estimate by 5.88% and increased 46.9% from the year-ago quarter.
Revenues increased 1.5% year over year to $7.40 billion and were within the guidance of $7.3-$7.9 billion. The figure, however, missed the Zacks Consensus Estimate by 2.9%.
Jabil witnessed some supply-chain headwinds in the fiscal fourth quarter, mainly in healthcare, industrial and cloud. This was partly offset by upsides in connected devices and networking and storage.
Quarter Details
Electronics Manufacturing Services (EMS) revenues accounted for 47% of total revenues and decreased 6% year over year to $3.48 billion due to the previously announced transition to a consignment model.
Diversified Manufacturing Services (DMS) revenues accounted for the rest of the total revenues and improved 10% year over year to $3.92 billion. The strong year-over-year performance in the DMS segment was broad-based with strength across healthcare, automotive and mobility businesses.
Gross margin, on a GAAP basis, expanded 120 basis points (bps) year over year to 7.9%.
Core EBITDA margin expanded 120 bps on a year-over-year basis to 7.2%.
As a percentage of revenues, selling, general and administrative (SG&A) expenses expanded 50 bps year over year to 4%, while research & development (R&D) expenses contracted 10 bps on a year-over-year basis to 0.1%.
Non-GAAP core operating margin expanded 70 bps on a year-over-year basis to 4.2%. The strong expansion was driven by steady top-line growth.
Balance Sheet & Cash Flow
As of Aug 31, 2021, cash and cash equivalents were $1.56 billion compared with $1.24 billion as of May 31, 2021. The company ended fourth-quarter fiscal 2021 with committed capacity under the global credit facilities of $3.8 billion. With this available capacity, along with year-end cash balance, Jabil ended fiscal 2021 with access to more than $5.3 billion of available liquidity.
During the fiscal fourth quarter, the company repurchased 2.9 million shares, bringing the total shares repurchased in fiscal 2021 to 8.8 million shares or $477 million.
Guidance
For first-quarter fiscal 2022, Jabil expects total revenues between $8 billion and $8.6 billion.
DMS revenues are expected to be $4.7 billion, which suggests an increase of 10% year over year. EMS revenues are forecast to remain unchanged year over year at $3.6 billion.
Core operating income is estimated in the $365-$425 million range. The company’s earnings are expected between $1.41 and $1.61 per share on a non-GAAP basis.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
VGM Scores
At this time, Jabil has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Jabil has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.