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Will Revenue Decline Impact Jabil's (JBL) Q2 Earnings?
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Jabil Inc. (JBL - Free Report) is scheduled to report second-quarter fiscal 2024 results on Mar 15, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 2.36%. It pulled off a trailing four-quarter earnings surprise of 4.11%, on average.
The leading global supplier of electronic manufacturing services is likely to record a top-line contraction year over year in the second quarter of fiscal 2024. Weakness in several end markets, macroeconomic challenges and inventory adjustments are expected to have hindered net sales.
Factors at Play
During the quarter, Jabil extended its collaboration with fintech leader Revolut to scale up the production and development of Revolut Reader, a mobile point-of-sale hardware solution. Leveraging Jabil’s specialized payment expertise, key retail experience and global manufacturing capabilities, the collaboration seeks to innovate more customized features for faster, easier and more secure in-person and mobile payments.
In the fiscal second quarter, Jabil enhanced its digital commerce capabilities and expanded the center of excellence in its plant in Chihuahua, Mexico. Along with improving operational efficiency, it will enable Jabil to augment the design, development and manufacturing of retail and warehouse automation solutions. This will also ensure better management of supply chain and logistics complexities. These developments are likely to be reflected in the upcoming results.
Jabil’s product division Badger Technologies deployed multipurpose autonomous robots in Stine, LLC retail stores. The robot is utilized for a multitude of tasks, including detecting out-of-stock products, improving price-tag accuracy and in various other daily operations. This is likely to have supported the net sales during the quarter.
However, management continues to keep a conservative approach, owing to the persistence of macroeconomic headwinds. Demand softness in multiple sectors, including connected devices, communications, digital print & retail, networking & storage, is likely to have impeded the top line. Excess inventory in the customer’s channel remains a headwind.
Key Developments in Q2
During the quarter, Jabil completed the divestiture of its Mobility business to China-based BYD Electronic (International) Company Limited for $2.2 billion cash. The divestment is likely to enhance Jabil’s financial flexibility to help reward its shareholders with risk-adjusted returns in the form of incremental share repurchases. In addition, it is expected to facilitate the company to invest more in electric vehicles, renewable energy, healthcare, AI cloud data centers and other end markets to strengthen its position as one of the largest global suppliers of electronic manufacturing services.
Overall Expectations
For the February quarter, the Zacks Consensus Estimate for the DMS vertical is pegged at $3.52 billion, indicating a decline from $4.05 billion reported in the year-ago quarter. Revenues from the EMS vertical are pegged at $3.37 billion, down 18% year over year.
The Zacks Consensus Estimate for revenues is pegged at $6.91 billion, which indicates a decline from the year-ago quarter’s tally of $8.13 billion. The consensus estimate for earnings is pegged at $1.78, suggesting a decrease from $1.88 reported in the prior-year quarter.
Earnings Whispers
Our proven model doesn’t conclusively predict 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 not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -8.43%. The Most Accurate Estimate is pegged at $1.63, while the Zacks Consensus Estimate stands at $1.78. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post earnings beat this season:
The Earnings ESP for Amprius Technologies Inc. (AMPX - Free Report) stands at +14.89%. The company carries a Zacks Rank of 3. It is scheduled to report quarterly numbers on Mar 21.
The Earnings ESP for Alpine Immune Sciences Inc. (ALPN - Free Report) stands at +8.57% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Mar 18.
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Will Revenue Decline Impact Jabil's (JBL) Q2 Earnings?
Jabil Inc. (JBL - Free Report) is scheduled to report second-quarter fiscal 2024 results on Mar 15, before the opening bell. In the last reported quarter, the company delivered an earnings surprise of 2.36%. It pulled off a trailing four-quarter earnings surprise of 4.11%, on average.
The leading global supplier of electronic manufacturing services is likely to record a top-line contraction year over year in the second quarter of fiscal 2024. Weakness in several end markets, macroeconomic challenges and inventory adjustments are expected to have hindered net sales.
Factors at Play
During the quarter, Jabil extended its collaboration with fintech leader Revolut to scale up the production and development of Revolut Reader, a mobile point-of-sale hardware solution. Leveraging Jabil’s specialized payment expertise, key retail experience and global manufacturing capabilities, the collaboration seeks to innovate more customized features for faster, easier and more secure in-person and mobile payments.
In the fiscal second quarter, Jabil enhanced its digital commerce capabilities and expanded the center of excellence in its plant in Chihuahua, Mexico. Along with improving operational efficiency, it will enable Jabil to augment the design, development and manufacturing of retail and warehouse automation solutions. This will also ensure better management of supply chain and logistics complexities. These developments are likely to be reflected in the upcoming results.
Jabil’s product division Badger Technologies deployed multipurpose autonomous robots in Stine, LLC retail stores. The robot is utilized for a multitude of tasks, including detecting out-of-stock products, improving price-tag accuracy and in various other daily operations. This is likely to have supported the net sales during the quarter.
However, management continues to keep a conservative approach, owing to the persistence of macroeconomic headwinds. Demand softness in multiple sectors, including connected devices, communications, digital print & retail, networking & storage, is likely to have impeded the top line. Excess inventory in the customer’s channel remains a headwind.
Key Developments in Q2
During the quarter, Jabil completed the divestiture of its Mobility business to China-based BYD Electronic (International) Company Limited for $2.2 billion cash. The divestment is likely to enhance Jabil’s financial flexibility to help reward its shareholders with risk-adjusted returns in the form of incremental share repurchases. In addition, it is expected to facilitate the company to invest more in electric vehicles, renewable energy, healthcare, AI cloud data centers and other end markets to strengthen its position as one of the largest global suppliers of electronic manufacturing services.
Overall Expectations
For the February quarter, the Zacks Consensus Estimate for the DMS vertical is pegged at $3.52 billion, indicating a decline from $4.05 billion reported in the year-ago quarter. Revenues from the EMS vertical are pegged at $3.37 billion, down 18% year over year.
The Zacks Consensus Estimate for revenues is pegged at $6.91 billion, which indicates a decline from the year-ago quarter’s tally of $8.13 billion. The consensus estimate for earnings is pegged at $1.78, suggesting a decrease from $1.88 reported in the prior-year quarter.
Earnings Whispers
Our proven model doesn’t conclusively predict 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 not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -8.43%. The Most Accurate Estimate is pegged at $1.63, while the Zacks Consensus Estimate stands at $1.78. 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.
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 earnings beat this season:
NIKE (NKE - Free Report) is set to release its quarterly numbers on Mar 21. It has an Earnings ESP of +5.21% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Earnings ESP for Amprius Technologies Inc. (AMPX - Free Report) stands at +14.89%. The company carries a Zacks Rank of 3. It is scheduled to report quarterly numbers on Mar 21.
The Earnings ESP for Alpine Immune Sciences Inc. (ALPN - Free Report) stands at +8.57% and it carries a Zacks Rank of 3. The company is scheduled to report quarterly numbers on Mar 18.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar