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Will Top-Line Contraction Dent Jabil's (JBL) Q3 Earnings?
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Jabil Inc. (JBL - Free Report) is scheduled to report third-quarter fiscal 2023 results on Jun 15, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 2.2%. It pulled off a trailing four-quarter earnings surprise of 5.6%, on average.
The St. Petersburg, FL-based company is expected to have recorded year-over-year lower revenues despite healthy demand for its 3D sensing solutions in the optical division due to a challenging macroeconomic environment and high channel inventory.
Factors at Play
During the quarter, Jabil introduced a new Active Optical Cable family to cater to the increasing demand for low-cost, high-performance and short-distance interconnects. Leveraging strong product design, precision manufacturing and packaging services, the new product aims to increase the deployment flexibility for operators at reduced costs and lower latency. In addition, the solution offers seamless compatibility with a vast range of Ethernet switch designs.
The product forms an integral part of Jabil’s photonics business unit that empowers firms to reduce the complexities of developing and deploying enhanced optical networking solutions by offering complete photonics capabilities and competencies. This is likely to have translated into incremental revenues for the company in the quarter.
In the fiscal third quarter, Jabil collaborated with KAV Sports to develop customized bicycle helmets that meet all safety standards while delivering improved performance and aesthetics. These 3D-printed helmets are made from custom nylon carbon-fiber material engineered by Jabil, leveraging its additive manufacturing prowess and pervasive manufacturing capabilities. This is likely to be reflected in the upcoming results.
However, high channel inventory, supply chain adversities and an uncertain macroeconomic environment are likely to have weighed on the company’s top-line performance. In addition, Jabil is witnessing intensifying competition from both domestic and international electronic manufacturing services and design providers. Moreover, commoditization and consolidation are likely to have affected overall revenues.
For the to-be-reported quarter, the Zacks Consensus Estimate for revenues is pegged at $8,165 million, which indicates a decline from the year-ago quarter’s reported figure of $8,328 million. The consensus estimate for earnings is pegged at $1.88, indicating an increase from $1.72 reported in the year-ago quarter.
Earnings Whispers
Our proven model predicts an earnings beat for Jabil this time around. 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 perfectly the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +0.43%, with the former pegged at $1.89 and the latter at $1.88. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:
The Earnings ESP for McCormick & Company, Incorporated (MKC - Free Report) is +4.61% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Jun 29.
The Earnings ESP for Carnival Corporation & plc (CCL - Free Report) is +2.86% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Jun 23.
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Will Top-Line Contraction Dent Jabil's (JBL) Q3 Earnings?
Jabil Inc. (JBL - Free Report) is scheduled to report third-quarter fiscal 2023 results on Jun 15, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 2.2%. It pulled off a trailing four-quarter earnings surprise of 5.6%, on average.
The St. Petersburg, FL-based company is expected to have recorded year-over-year lower revenues despite healthy demand for its 3D sensing solutions in the optical division due to a challenging macroeconomic environment and high channel inventory.
Factors at Play
During the quarter, Jabil introduced a new Active Optical Cable family to cater to the increasing demand for low-cost, high-performance and short-distance interconnects. Leveraging strong product design, precision manufacturing and packaging services, the new product aims to increase the deployment flexibility for operators at reduced costs and lower latency. In addition, the solution offers seamless compatibility with a vast range of Ethernet switch designs.
The product forms an integral part of Jabil’s photonics business unit that empowers firms to reduce the complexities of developing and deploying enhanced optical networking solutions by offering complete photonics capabilities and competencies. This is likely to have translated into incremental revenues for the company in the quarter.
In the fiscal third quarter, Jabil collaborated with KAV Sports to develop customized bicycle helmets that meet all safety standards while delivering improved performance and aesthetics. These 3D-printed helmets are made from custom nylon carbon-fiber material engineered by Jabil, leveraging its additive manufacturing prowess and pervasive manufacturing capabilities. This is likely to be reflected in the upcoming results.
However, high channel inventory, supply chain adversities and an uncertain macroeconomic environment are likely to have weighed on the company’s top-line performance. In addition, Jabil is witnessing intensifying competition from both domestic and international electronic manufacturing services and design providers. Moreover, commoditization and consolidation are likely to have affected overall revenues.
For the to-be-reported quarter, the Zacks Consensus Estimate for revenues is pegged at $8,165 million, which indicates a decline from the year-ago quarter’s reported figure of $8,328 million. The consensus estimate for earnings is pegged at $1.88, indicating an increase from $1.72 reported in the year-ago quarter.
Earnings Whispers
Our proven model predicts an earnings beat for Jabil this time around. 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 perfectly the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +0.43%, with the former pegged at $1.89 and the latter at $1.88. 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-eps-surprise | Jabil, Inc. Quote
Zacks Rank: Jabil currently has a Zacks Rank #3.
Other Stocks to Consider
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:
Accenture plc (ACN - Free Report) is set to release quarterly numbers on Jun 22. It has an Earnings ESP of +1.42% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for McCormick & Company, Incorporated (MKC - Free Report) is +4.61% and it carries a Zacks Rank of 2. The company is scheduled to report quarterly numbers on Jun 29.
The Earnings ESP for Carnival Corporation & plc (CCL - Free Report) is +2.86% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Jun 23.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.