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Will Health Revenue Growth Buoy Jabil (JBL) Q3 Earnings?

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Jabil Inc. (JBL - Free Report) is scheduled to report third-quarter fiscal 2022 (ended May 30, 2022) results on Jun 16, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 15.1%. It pulled off a trailing four-quarter earnings surprise of 13.5%, on average.

The St. Petersburg, FL-based company is expected to have recorded year-over-year higher revenues, driven by solid demand in key end markets, diligent execution of operational plans and skillful management of supply chain dynamics.

Factors at Play

During the quarter, Jabil unveiled a new transceiver to expand its coherent product family. It significantly minimizes power consumption with the most recent digital signal processing and optical engine technologies. The coherent transceiver is compatible with both host systems developed for current 100G/200G modules. It offers a highly compact form factor, low-power operations and unprecedented performance that can be aligned into both pluggable and on-board form factors. The company also launched PK 5000, an eco-friendly, powder-based additive material engineered to deliver improved strength, chemical resistance and resilience compared to general-purpose available nylon materials. Such innovative products are likely to have aided its quarterly performance.

The company formed Jabil Payment Solutions business unit to accelerate the delivery of leading-edge payment and point-of-sale platforms. It is uniquely positioned to meet solid demand for cashless, contactless transactions with highly secure and scalable payment acceptance solutions and services. This is likely to have aided top-line growth in the quarter.

In third-quarter fiscal 2022, Jabil introduced the Qfinity autoinjector platform, a simple, reusable and modular solution for subcutaneous drug self-administration. This sustainable and reusable product is available at a lower cost than other alternatives in the market. It inked a contract with SaltMED, a medical device company focused on innovative medical aesthetic technology, to become its leading manufacturer and supplier of products. In addition, Jabil entered into a manufacturing collaboration to use the world-class manufacturing capabilities of Cardo Systems to keep pace with ever-increasing production volumes. The use of Jabil’s supply chain expertise and dedicated Workcell model will aid Cardo in mitigating risks, driving lower costs and ensuring on-time deliveries. These are likely to have generated incremental revenues for Jabil in the quarter.

For the to-be-reported quarter, management expects total revenues to be between $7.9 billion and $8.5 billion. The Zacks Consensus Estimate for revenues is pegged at $8,206 million, which indicates growth from the year-ago quarter’s reported figure of $7,215 million. The consensus estimate for earnings is pegged at $1.62. It reported adjusted earnings of $1.30 per share.

Earnings Whispers

Our proven model does not predict an earnings beat for Jabil for the fiscal third quarter. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at $1.62. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Jabil, Inc. Price and EPS Surprise

Jabil, Inc. Price and EPS Surprise

Jabil, Inc. price-eps-surprise | Jabil, Inc. Quote

Zacks Rank: Jabil has a Zacks Rank #3.

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

The Kroger Co. (KR - Free Report) is set to release quarterly numbers on Jun 16. It has an Earnings ESP of +0.12% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Earnings ESP for Commercial Metals Company (CMC - Free Report) is +10.00% and it carries a Zacks Rank of 1. The company is set to report quarterly numbers on Jun 16.

The Earnings ESP for Delta Air Lines, Inc. (DAL - Free Report) is +10.99% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Jul 13.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.