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Jabil (JBL) Trims Revenue Outlook on Soft Demand Trends
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Jabil Inc. (JBL - Free Report) recently updated its revenue guidance for the first quarter of fiscal 2024 to better reflect the current business conditions. The revised outlook offers better clarity regarding the scale of its operations as it aims to navigate the challenging macroeconomic environment.
Management currently expects fiscal first-quarter revenues to lie between $8.3 billion and $8.4 billion, down from the previously estimated $8.4-$9 billion. The trimmed revenue outlook is primarily attributable to a softening in demand owing to short-term inventory corrections across certain end markets. However, non-GAAP earnings are likely to be near the midpoint of the previously guided range of $2.40-$2.80 per share.
Jabil expects the market to remain constrained in the fiscal second quarter as well, resulting in revenues of $7-$7.6 billion. For fiscal 2024, revenues are currently expected to be in the vicinity of $31 billion, with core operating margin in the range of 5.3-5.5% and core earnings of $9.00 per share.
Nevertheless, Jabil is witnessing solid momentum in industrial business driven by growth in clean and smart energy infrastructure adoption. The company has an established global presence and a worldwide connected factory network, which enables it to scale up production per the evolving market dynamics. Management’s focus on improving working capital management and integrating sophisticated AI and ML capabilities to enhance the efficiency of its internal process are major tailwinds.
With more than 250,000 employees across 100 locations in 30 countries, Jabil is likely to benefit from secular growth drivers with strong margin and cash flow dynamics. Moreover, proven technical and design capabilities, manufacturing know-how, supply chain insights and global product management expertise have put it in good stead. An extensive global footprint is further strengthened by a centralized procurement process, which, coupled with a single Enterprise Resource Planning system, aids customers with end-to-end supply chain visibility.
The stock has gained 89.7% in the past year compared with the industry’s growth of 50.4%.
Comtech Telecommunications Corp. (CMTL - Free Report) , carrying a Zacks Rank #2 (Buy), is a solid pick. Headquartered in Melville, NY, the company is a leading global provider of next-generation 911 emergency systems and secure wireless communications technologies to commercial and government customers.
Comtech’s key satellite earth station modems incorporate forward error correction and bandwidth compression technologies, which enable its customers to optimize their satellite networks by either reducing their satellite transponder lease costs or increasing data.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 20.4% and delivered an earnings surprise of 12%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
AudioCodes Ltd. (AUDC - Free Report) carries a Zacks Rank #2. It has a long-term earnings growth expectation of 24.8% and delivered an earnings surprise of 14%, on average, in the trailing four quarters.
Headquartered in Lod, Israel, AudioCodes offers advanced communications software, products, and productivity solutions for the digital workplace. It provides a broad range of innovative products, solutions and services that are used by large multi-national enterprises and leading tier-1 operators around the world.
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Jabil (JBL) Trims Revenue Outlook on Soft Demand Trends
Jabil Inc. (JBL - Free Report) recently updated its revenue guidance for the first quarter of fiscal 2024 to better reflect the current business conditions. The revised outlook offers better clarity regarding the scale of its operations as it aims to navigate the challenging macroeconomic environment.
Management currently expects fiscal first-quarter revenues to lie between $8.3 billion and $8.4 billion, down from the previously estimated $8.4-$9 billion. The trimmed revenue outlook is primarily attributable to a softening in demand owing to short-term inventory corrections across certain end markets. However, non-GAAP earnings are likely to be near the midpoint of the previously guided range of $2.40-$2.80 per share.
Jabil expects the market to remain constrained in the fiscal second quarter as well, resulting in revenues of $7-$7.6 billion. For fiscal 2024, revenues are currently expected to be in the vicinity of $31 billion, with core operating margin in the range of 5.3-5.5% and core earnings of $9.00 per share.
Nevertheless, Jabil is witnessing solid momentum in industrial business driven by growth in clean and smart energy infrastructure adoption. The company has an established global presence and a worldwide connected factory network, which enables it to scale up production per the evolving market dynamics. Management’s focus on improving working capital management and integrating sophisticated AI and ML capabilities to enhance the efficiency of its internal process are major tailwinds.
With more than 250,000 employees across 100 locations in 30 countries, Jabil is likely to benefit from secular growth drivers with strong margin and cash flow dynamics. Moreover, proven technical and design capabilities, manufacturing know-how, supply chain insights and global product management expertise have put it in good stead. An extensive global footprint is further strengthened by a centralized procurement process, which, coupled with a single Enterprise Resource Planning system, aids customers with end-to-end supply chain visibility.
The stock has gained 89.7% in the past year compared with the industry’s growth of 50.4%.
Image Source: Zacks Investment Research
Jabil presently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Picks
Comtech Telecommunications Corp. (CMTL - Free Report) , carrying a Zacks Rank #2 (Buy), is a solid pick. Headquartered in Melville, NY, the company is a leading global provider of next-generation 911 emergency systems and secure wireless communications technologies to commercial and government customers.
Comtech’s key satellite earth station modems incorporate forward error correction and bandwidth compression technologies, which enable its customers to optimize their satellite networks by either reducing their satellite transponder lease costs or increasing data.
Arista Networks, Inc. (ANET - Free Report) , carrying a Zacks Rank #2, is likely to benefit from strong momentum and diversification across its top verticals and product lines. The company has a software-driven, data-centric approach to help customers build their cloud architecture and enhance their cloud experience. Arista has a long-term earnings growth expectation of 20.4% and delivered an earnings surprise of 12%, on average, in the trailing four quarters.
It holds a leadership position in 100-gigabit Ethernet switching share in port for the high-speed datacenter segment. Arista is increasingly gaining market traction in 200- and 400-gig high-performance switching products and remains well-positioned for healthy growth in data-driven cloud networking business with proactive platforms and predictive operations.
AudioCodes Ltd. (AUDC - Free Report) carries a Zacks Rank #2. It has a long-term earnings growth expectation of 24.8% and delivered an earnings surprise of 14%, on average, in the trailing four quarters.
Headquartered in Lod, Israel, AudioCodes offers advanced communications software, products, and productivity solutions for the digital workplace. It provides a broad range of innovative products, solutions and services that are used by large multi-national enterprises and leading tier-1 operators around the world.