You might also like
Jabil Inc. is a leading provider of worldwide manufacturing services and solutions, offering comprehensive electronics design, production, and product management services to companies across various industries and end markets . The company operates through two main segments: Electronics Manufacturing Services (EMS) and Diversified Manufacturing Services (DMS) . Jabil's revenue is primarily derived from production and product management services, which involve manufacturing tangible components built to customer specifications . The company has a global presence, with a substantial portion of its revenue generated from international operations .
- Electronics Manufacturing Services (EMS) - Leverages IT, supply chain design, and engineering technologies centered on core electronics, serving industries such as 5G, wireless and cloud, digital print and retail, industrial and semi-capital equipment, and networking and storage .
- Diversified Manufacturing Services (DMS) - Provides engineering solutions with an emphasis on material sciences, technologies, and healthcare, catering to automotive and transportation, connected devices, and healthcare and packaging industries .
- Your utilization rates have dropped to around 70% due to surplus capacity, yet you have decided not to restructure or reduce the number of sites, believing end markets will come back. How confident are you in this approach, and what is the risk to margins if demand does not recover as expected?
- In fiscal '24, you divested your mobility business and reshaped your portfolio away from legacy networking, accounting for $2.4 billion in revenue loss. How do you plan to achieve organic growth in fiscal '25, and what strategies are in place to offset this significant reduction in revenue?
- Given the anticipated 12% year-on-year growth in the Intelligent Infrastructure segment, primarily driven by AI and data center infrastructure, are you seeing any signs of slowdown or risks to sustaining this growth rate, especially considering potential impacts from consignment in fiscal '25?
- With your AI-related businesses expected to deliver margins in line with or slightly accretive to enterprise targets, can you provide more clarity on the profitability of these investments, and how sustainable are these margins given the rapid pace of technology advancement and competition in AI hardware?
- Despite acknowledging challenges in harnessing AI and the need for significant investment in capabilities such as advanced packaging OSAT and process development for photonics, how are you addressing these challenges to ensure Jabil remains competitive, and what are the potential risks if these investments do not yield the expected returns?
| Customer | Relationship | Segment | Details |
|---|---|---|---|
Apple | Electronics manufacturing and supply chain services | DMS | Contributed 11% of Jabil's FY 2024 total revenue of \$28.883 billion (i.e., approximately \$3.177 billion) |
Recent developments and announcements about JBL.
Financial Reporting
-
Revenue and Profit Performance: Jabil reported Q1 revenue of $7 billion, which is a 1% increase year-on-year, excluding the impact of a $1.45 billion mobility divestiture from the prior year. Core operating income for the quarter was $347 million, with core operating margins at 5% despite some impact from hurricanes. GAAP operating income was $197 million, and GAAP diluted earnings per share was $0.88, while core diluted earnings per share was $2 .
-
Management’s Forward Guidance: For the second quarter, Jabil expects total company revenue to be between $6.1 billion and $6.7 billion. Core operating income is projected to be between $286 million and $346 million, with GAAP operating income expected to range from $183 million to $263 million. Core diluted earnings per share is estimated to be between $1.60 and $2, and GAAP diluted earnings per share is expected to be between $0.69 and $1.27 .
-
Market Conditions and Strategic Initiatives: Jabil is seeing strong demand in its Intelligent Infrastructure segment, particularly in AI-related cloud and data center infrastructure markets. The company is also focusing on expanding its capabilities in thermal management and data center ecosystems through acquisitions like Mikros Technologies .
-
Analyst Questions and Management Responses: Analysts inquired about the impact of new silicon in the cloud segment and its implications for Jabil's business. Management indicated that while it's early days, they expect it to drive growth and new business opportunities. They also discussed the impact of hurricanes on margins and the strategic focus on M&A to enhance capabilities in growth markets like healthcare and intelligent infrastructure .
-
Capital Allocation: Jabil is committed to completing its $1 billion share repurchase authorization by the end of FY '25, with 80% of free cash flow allocated to share buybacks and 20% to M&A. The company is focusing on expanding capabilities in growth markets through strategic acquisitions .
Earnings Call
Jabil has recently released its earnings call transcript for the first quarter of fiscal year 2025. Here are the key points from the call:
Overall, Jabil is optimistic about its growth prospects, driven by strong performance in key segments and strategic initiatives aimed at enhancing its market position.
Earnings Report
Jabil Inc. has released its earnings results for the first quarter of fiscal year 2025, reporting strong financial performance. The company achieved a net revenue of $7.0 billion, with a U.S. GAAP operating income of $197 million and a U.S. GAAP diluted earnings per share of $0.88. On a non-GAAP basis, the core operating income was $347 million, and the core diluted earnings per share was $2.00. The results were driven by strength in the Cloud, Data Center Infrastructure, and Digital Commerce end-markets .
Looking ahead, Jabil has raised its fiscal 2025 outlook, now anticipating approximately $27.3 billion in net revenue and core operating margins of 5.4%. The core earnings per share are expected to be $8.75, with robust adjusted free cash flow generation of $1.2 billion for the year .
For the second quarter of fiscal year 2025, Jabil projects net revenue between $6.1 billion and $6.7 billion, U.S. GAAP operating income between $183 million and $263 million, and U.S. GAAP diluted earnings per share ranging from $0.69 to $1.27. The core operating income is expected to be between $286 million and $346 million, with core diluted earnings per share between $1.60 and $2.00 .